Japan’s economy has expanded at a faster pace than expected after a further easing of pandemic regulations boosted consumption, a positive outcome that will likely keep speculation simmering of a possible early election and potential central bank policy change.
Gross domestic product expanded at an annualized pace of 1.6% in the first three months of the year, exceeding analyst expectations, Cabinet Office data showed Wednesday. A revision of earlier figures also showed Japan went through a technical recession at the end of last year.
Better-than-expected spending by consumers and businesses was the main driver behind last quarter’s growth, while net trade dragged on the overall figures as shipments of cars and chip-making machinery fell.
The stronger-than-forecast reading bodes well for the nation’s economic recovery and could give Prime Minister Fumio Kishida more leeway to consider an early poll. The Japanese leader is hosting Group of Seven leaders in Hiroshima this week and a successful summit could give his support ratings an additional lift.
“Politically this is good timing,” said Hiroaki Muto, economist at Sumitomo Life Insurance. “It’s kind of a sweet spot. Overseas economies are still just about holding up while Japan’s economy is recovering on post-COVID revenge spending. It’s a good environment for calling an election.”
Source : Japan Times
