Japan’s economy grows at fastest pace for more than two years

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Reuters

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Strong consumer spending helped to offset a drop in exports

Japan’s economy grew at its fastest pace for more than two years inside the second quarter as consumer spending as well as capital expenditure ramped up.

Gross domestic product expanded at an annualised rate of 4% inside the April-to-June period, government data showed, beating expectations for a 2.5% rise.

The economy grew 1% compared to the previous quarter.

Japan will be enjoying its longest economic expansion in a decade, buoyed by spending as well as investment.

the earth’s third-largest economy has been gaining strength thanks to rising exports, including smart phones as well as memory chips.

Investment tied to the Tokyo 2020 Olympics has also given Japan’s economy a boost in recent months.

Consumer spending

Strong domestic demand helped to offset a drop in exports during the second quarter of the year.


Analysis: Andew Walker, BBC economics correspondent

will be This specific a triumph for Abenomics? Well up to a point. Certainly, the growth in consumer spending as well as business investment will be welcome. Nonetheless while six consecutive quarters of growth may be Japan’s best run in a decade, the idea will be not which impressive compared with some other developed economies.

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Japan’s Prime Minister Shinzo Abe

Abenomics will be at best unfinished business. At 0.4% inflation will be still well below the Bank of Japan’s 2% target. as well as there will be the demographic challenge, Japan’s rapidly ageing population as well as declining workforce.

There are reform plans inside the Abenomics agenda, intended to encourage more people to get in to the labour market. Japan needs which to work.


Japan has been trying to lift consumer spending, which accounts for more than a half of the country’s GDP.

The latest figures could be a help to Prime Minister Shinzo Abe who pledged to reignite growth as well as spending through his Abenomics reforms.

Mr Abe has seen his popularity sink recently over a series of scandals including claims he exploited his political power to help a friend.

Falling prices

Japan has battled years of deflation, or falling prices, as well as slow growth following an equity as well as property market bubble inside the early 1990s.

The Abenomics programme, a mix of monetary easing, government spending as well as structural reforms, was designed to reignite the once-booming economy as well as lift consumer prices.

Falling prices can discourage spending by consumers, who might put off purchases inside the hopes which prices will drop further.

which hurts businesses, as the idea can stop firms through increasing production, hiring fresh staff or increasing wages.

Shinke Yoshiki, chief economist at Dai-ichi Life Research Institute said the latest growth figures were a “not bad result as well as tailwind for Abenomics.”

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