- Title: Japan's GDP growth thumps expectations on consumer, business resilience
- Date: 9th August 2019
- Summary: TOKYO, JAPAN (FILE) (REUTERS) VARIOUS OF PEOPLE WALKING ON TOKYO STREETS VARIOUS OF PEOPLE SHOPPING VARIOUS OF CARS DISPLAYED AT DEALERSHIP OTA, JAPAN (FILE) (REUTERS) AUTOMOBILE PRODUCTION LINE VARIOUS OF WORKER WORKING AT PRODUCTION LINE TOKYO, JAPAN (FILE) (REUTERS) EXTERIOR OF ARIAKE ARENA, CONSTRUCTION ONGOING VARIOUS OF WORKERS AT CONSTRUCTION SITE VARIOUS OF SHIPPING CARGO AT PORT NATIONAL FLAG OF JAPAN FLYING
- Embargoed: 23rd August 2019 04:40
- Keywords: Japan GDP gross domestic product economy growth Tokyo
- Location: OTA, TOKYO, JAPAN
- City: OTA, TOKYO, JAPAN
- Country: Japan
- Topics: Government/Politics
- Reuters ID: LVA001ARHVLMV
- Aspect Ratio: 16:9
- Story Text:Japan's economy grew much faster than expected in April-June to mark the third straight quarter of expansion, as robust private consumption and business investment offset the hit to exports from cooling global demand.
The data offers some relief for the Bank of Japan, which is under pressure to follow other central banks and ramp up stimulus to head off heightening global risks.
Gross domestic product (GDP) grew at an annualised 1.8% in the second quarter, the Cabinet Office's preliminary data showed on Friday, far exceeding a median market forecast for a 0.4% increase. It followed a revised 2.8% gain in January-March.
"There are no signs that the uncertainty from the trade war has prompted firms to rein in investment spending," said Marcel Thieliant, senior Japan economist at Capital Economics.
"Today's data will assuage some of the concerns among Bank of Japan Board members about the impact of the global slowdown on Japan's economy."
Private consumption, which accounts for about 60% of the economy, rose 0.6% from the previous quarter to mark the third straight quarter of increase, thanks to brisk demand for cars and air conditioners, a government official told reporters.
Capital expenditure increased 1.5%, accelerating from a 0.4% rise in January-March and beating a median market forecast for a 0.7% gain, as companies invested in streamlining operations in the face of labour shortages.
Office building construction and public works projects drove the strength in capital expenditure, analysts said, a sign the economy's resilience was underpinned by those sectors less affected by slowing global trade.
Even exports, which were expected to be weak due to the broadening fallout from the U.S.-China trade war, fell just 0.1% after a much bigger 2.0% drop in January-March.
Domestic demand added 0.7 percentage point to GDP growth, more than offsetting the 0.3 point negative contribution from external demand, the data showed.
On a quarter-on-quarter basis, GDP expanded 0.4%, compared with a median estimate of a 0.1% gain, the data showed.
(Production: Masashi Kato, Akiko Okamoto)
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