TOKYO: Japan’s economy expanded by a faster-than-expected annualised 3.1 per cent in April-June, data showed on Thursday (Aug 15), rebounding from the previous quarter thanks to a solid pick up in consumption.
The data backs up the Bank of Japan’s forecast that a solid economic recovery will help inflation sustainably hit its 2 per cent target, and justify raising interest rates further.
The increase in gross domestic product (GDP) compared with a median market forecast for a 2.1 per cent gain, and followed a revised 2.3 per cent slump in the first quarter, government data showed. The reading translates into a quarterly rise of 0.8 per cent, beating a 0.5 per cent increase expected by economists in the Reuters’ poll.
Private consumption has been a soft spot in the economy as households struggle with rising living costs, blamed in part on higher import prices due to the weak yen.
Private consumption, which accounts for more than half of the economic output, rose 1.0 per cent, compared with forecast for a 0.5 per cent increase and the first gain in five quarters.
Capital spending, a key driver of private demand-led growth, rose 0.9 per cent in the second quarter, versus an increase of 0.9 per cent seen by economists in Reuters’ poll.
External demand, or exports minus imports, knocked 0.1 point off growth, the data showed.
The Bank of Japan (BOJ) raised interest rates last month and detailed a plan to taper its huge bond buying in another step toward phasing out its massive monetary stimulus.
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Publish date : 2024-08-14 13:59:00
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