Japan’s economy expands more than expected on post-Covid spending
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JAPAN’S economy expanded an annualised 1.6 per cent in the January-March period to mark the first increase in three quarters, data showed on Wednesday, as a post-Covid rebound in consumption offset global headwinds.
But mounting signs of a slowdown in US, European and Chinese growth clouded the outlook for the export-reliant economy, heightening uncertainty on how soon the central bank can phase out its massive stimulus programme.
The increase in gross domestic product (GDP) was much bigger than a median market forecast for a 0.7 per cent gain, and followed a revised 0.1 per cent fall in the final quarter of last year, government data showed.
Private consumption, which makes up more than half the economy, grew 0.6 per cent in January-March from the previous quarter, as the country’s re-opening from the pandemic boosted service spending. That was faster than forecasts of a 0.4 per cent increase.
Capital expenditure was up 0.9 per cent, dashing expectations for a 0.4 per cent fall, the data showed.
External demand, or net exports, shaved 0.3 of a percentage point off GDP, highlighting the strain on manufacturers from slowing overseas growth.
While a delayed recovery in spending from the removal of Covid-related curbs is underpinning growth, sluggish global demand and the hit to households from rising living costs cloud the outlook for a sustained recovery. REUTERS
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