Japan's economy rebounds on healthy consumption as Covid restrictions ease

Japan's economy grew at an annual pace of 1.6 per cent in the quarter through March as private demand rebounded after Covid-19-related restrictions were eased, according to data released on Wednesday

AP Tokyo

Photo: Pexels

Listen to This Article

Japan's economy grew at an annual pace of 1.6 per cent in the quarter through March as private demand rebounded after COVID-19-related restrictions were eased, according to data released on Wednesday.

Real gross domestic product, which measures the sum value of a nation's products and services, grew 0.4 per cent in January-March on-quarter in the world's third largest economy, the government Cabinet Office said.

That was the strongest GDP growth pace since April-June 2022 marked a 1.1 per cent growth. It was also better than the market consensus forecast of 0.2 per cent.

The annualised pace shows what the growth would have been if what was marked during the quarter had continued for a year.

The biggest contributor to growth was private demand, surging an annual 3.1 per cent, with consumer spending and private investment showing a healthy rebound. The recent opening of borders to tourists and other incoming travel has also helped consumption perk up. Public demand grew at an annualised 1.8 per cent.

Japan's economy appears to be on a gradual recovery track despite sluggish global demand, said Robert Carnell, regional head of research Asia-Pacific at ING.

Also Read

Karnataka, Gujarat make most progress in clean energy transition: Report

Japan PM sacks 4th minister in two months to patch up scandal-hit Cabinet

Canada's real GDP grows 3.8% in 2022 on back of post-pandemic revival

Gujarat Assembly elections: BJP upbeat ahead of counting of votes

Sitiveni Rabuka confirmed as Fiji prime minister after close election

How are US banks, Fed preparing for a default, the chaos expected to follow

World Hypertension Day 2023: History, significance, theme and more

First lady's relative attacked as Macron commits to retirement age increase

US Prez Biden to meet PM Modi in Japan on the sidelines of G7 summit

It's the algorithms: Study finds YouTube sends gun videos to 9-year-olds

Some analysts think such signs of recovery will prompt Japan's central bank to take action on a policy change and move toward higher interest rates. The Bank of Japan policy board meets next month.

On the negatives, slowing exports dragged on growth, reflecting lagging global economies. Japan's January-March exports dropped an annualised 15.6 per cent.

While much of the world, including the US and Europe, has been focused on inflationary pressures, Japan has been more cautious about its approach to inflation because it's been hit by decades of the opposite problem: deflation, when prices spiral down.

Electricity bills were raised across the nation recently. Although that doesn't directly affect core inflation, the move is likely to have some trickle-down impact to boost inflation, analysts say.

The relatively positive read for the Japanese economy may even work toward supporting Prime Minister Fumio Kishida's standings with the public, which has had its ups and downs. Speculation is simmering that Kishida may call a snap parliamentary election later this year.

Kishida's ruling Liberal Democratic Party has ruled Japan almost continually since the end of World War II. In recent years, it has faced few serious challenges because of a splintered opposition.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: May 17 2023 | 11:01 AM IST

Explore News