Japanese Economy Expands Jsut 1.5 Percent

On the strength of robust exports, Japan's economy expanded by 1.5 percent in the three months leading up to June, according to official figures released on Tuesday.

According to Bloomberg News, the average projection for quarter-over-quarter growth in the third-largest economy in the world was 0.8 percent.

According to figures from the Cabinet Office, the economy expanded by an annualized 6.0 percent in the third quarter, above the market consensus of 2.9 percent. This gives Japan three consecutive quarters of growth.

However, the figures also highlighted the persistent weakness of domestic demand as people battle against rising prices.

"Japan's exports have recovered as the supplies crisis eased for the auto sector while the yen's depreciation provided support," Ryutaro Kono, chief economist at BNP Paribas, wrote in a note issued before the release of the data.

Hiroyuki Ueno, senior economist at SuMi TRUST, also said pent-up demand from the pandemic and an increase in capital investment were boosting the economy.

"The hospitality sector is expected to remain a driver of economic growth due to the increase in inbound tourism, as the pandemic is now in the rearview mirror," he wrote in a report ahead of the release of the data.

"Although the number of inbound visitors to Japan has not yet returned to pre-pandemic levels, the per capita consumption of tourists during their stay in Japan has increased, partly due to the weak yen," he wrote.

The largest economy in the world, the US, has also defied predictions that it would slow down, gaining momentum in the second quarter of the year thanks to consumer and industry investment. Additionally, its labor market has remained strong.

The strength, which coincides with US officials' efforts to curb inflation and ease demand, gives rise to expectations that the Federal Reserve's aggressive campaign of interest rate hikes will contain price increases without sparking a significant recession.

Britain's GDP grew by 0.2 percent from April to June, exceeding expectations and being reported earlier this month.

China continues to be a big concern for the global economy, in addition to excessive inflation.

As statistics released last month revealed growth had fallen short of forecasts and that consumers were still cautious, pressure on officials to announce more stimulus measures increased. As a result, China's economy continued to show symptoms of weakness in the second quarter.

The discouraging numbers came after a spate of subpar readings that showed the post-Covid rebound was already faltering and showed how difficult it would be for authorities to regain momentum.

According to China's National Statistics Bureau, the world's second-largest economy expanded by 6.3 percent on-year in April through June, which was faster than the previous three months but far less than the 7.1 percent economists polled by AFP had projected.

That occurred despite having an extremely low baseline comparison with the previous year, which saw a number of Covid lockdowns in key cities across the nation.

Source: AFP