And after Japan’s GDP growth rate in the last three months of last year was zero, experts expected the economy to grow just 0.1% in the first quarter, but the result exceeded 3 times this figure.
Government data also showed on Wednesday that the world’s third-largest economy grew 1.6% year-on-year in the January-March period, far beating expectations for growth of 0.7%. registering the first growth in three quarters on a quarterly basis.
But growing signs of slowing growth in the United States, Europe and China are clouding the outlook for Japan’s export-dependent economy, adding to uncertainty over how quickly the Bank of Japan will end its lockdown. massive stimulus program.
“Consumption will continue to support growth as the removal of coronavirus restrictions boosts spending in tourism and services,” said Yoshiki Shinki, chief economist at the Dai-ichi Research Institute.
“However, the economic recovery will be moderate as weak external demand will affect exports. It will be a tug of war between strong domestic demand and stagnant exports,” he said.
Private domestic consumption, which accounts for more than half of the economy, rose 0.6% in the January-March period from the previous quarter as the country’s post-pandemic reopening boosted spending on services . This is more than expected for a 0.4% increase.
Capital spending data was also positive, surprisingly up 0.9% against expectations of a 0.4% decline.
Japanese Economy Minister Shigeyuki Goto said Japan’s nominal GDP hit a record high of 570.1 trillion yen (about $4.22 trillion), buoyed in part by rising prices.
However, Goto said caution was in order: “We need to pay close attention to the global economy and the implications for financial markets and rising interest rates on the real economy,” he said. -he declares.
Strong domestic demand offset weak exports, which fell 4.2% in the January-March period, marking the first decline in six quarters.
A decline in external demand, or net exports, reduced first-quarter gains by 0.3 percentage points, which was offset by a 0.7 percentage point increase in domestic demand.
Analysts say rising fuel and food prices, which have pushed Japanese consumer inflation above the central bank’s 2% target, could also hurt consumption unless wage increases. do not continue.
Inflation-adjusted wages fell 2.3% in the January-March period from a year earlier, more than the 1.8% drop in the previous quarter, underscoring the growing pain families due to the rising cost of living.
And the Tokyo Stock Exchange interacted positively with the GDP data, with the Nikkei index rising 0.41%, or 123.44 points, in early trading to 29,966.43 points, while the Topix index wider gained 0.11%, or 2.32 points, to reach 2129.50 points. .
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