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- October 22, 20267°
- BIST10011,561-0.14%
- USD49.60+0.05%
- EUR55.68+0.11%
- GOLD4,100.40-1.20%
- INTEREST37.00%-1.00
- BITCOIN81,691-2.78%
- October 22, 20267°
Japan’s economy expanded at an annualized rate of 1.1% from April to June
Japan’s economy expanded at an annualized rate of 1.1% in the April-June period, extending its growth streak into a third quarter. Public consumption supported growth, while private consumption fell 0.02% and business investment declined 1.2%.
Japan’s gross domestic product increased 0.3% in inflation-adjusted terms in the April-June period compared with January-March. Annualized growth reached 1.1%, extending the economy’s expansion to a third consecutive quarter, with public spending contributing to the increase.
This was the first full quarter in which the impact of the Iran war on energy prices was reflected in the calculations.
Consumption declined for the first time in eight quarters
Private consumption, which accounts for more than half of the economy, fell 0.02%. Household spending therefore declined for the first time in eight quarters, highlighting the fragility of domestic demand.
An official from Japan’s Cabinet Office said the support program implemented by the government contributed to the decline. The program, which began in April, provided assistance for high school tuition and school meals, reducing consumers’ need to spend in these areas.
A tax increase on heated tobacco products introduced in April also weighed on demand. After the environmental performance tax was abolished at the end of March, demand for automobiles and purchases of air conditioners ahead of tighter energy-saving rules remained below expectations.
Public consumption lifted growth
Public consumption increased 1.6%. This rise, driven by the expanded subsidy program, pushed gross domestic product higher.
Business investment, meanwhile, fell 1.2% from the January-March period. A decline in software orders played a role in the decrease.
Exports rose as imports declined
Japan’s exports increased 0.5%, while imports fell 1.5%. The de facto closure of the Strait of Hormuz following conflicts in the Middle East adversely affected crude oil shipments.
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