Friday, September 30

Japan’s Economy Accelerates Following Relaxation of Covid Curbs


Japan’s economic growth accelerated in the three months through June as consumer spending picked up following the end of coronavirus curbs on businesses.

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(Bloomberg) — Japan’s economic growth accelerated in the three months through June as consumer spending picked up following the end of coronavirus curbs on businesses.

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Gross domestic product grew at an annualized pace of 2.2% in the second quarter of this year, the Cabinet Office reported Monday. Economists had expected an expansion of 2.6%. First quarter GDP was revised up to a 0.1% expansion from a previous 0.5% contraction.

The end of pandemic restrictions on businesses in late March helped spur the economy. Consumer spending, which accounts for more than half of Japan’s economic output, led the growth. Still, the gains were more limited than expected a few months ago, showing that pent -up demand among consumers has been moderate.

The report came out as downside risks mount at home and abroad. Japan has been reporting record Covid infection cases with daily numbers continuing to top 200,000 this month. The government has so far kept economic activity as normal as possible without bringing back restrictions. But high -frequency data suggest people’s mobility is falling.

In Japan’s key trading partners, growth is slowing with the US and Europe fighting inflation and China sticking to its zero-Covid policy. The war in Ukraine continues to disrupt food and energy supplies while the crisis in Taiwan adds to geopolitical risks.

What Bloomberg Economics Says…

“Looking ahead, we expect GDP growth to slow in 3Q. Persistent cost-push inflation and a surge in new virus cases point to downside risks for the recovery.”

— Yuki Masujima, economist

For the full report, click here.



financialpost.com