TOKYO: Japan’s economy rebounded more than expected in the second quarter after slumping in the first three months of this year, data showed – a sign consumption and capital expenditure were recovering from the coronavirus pandemic’s initial hit.
But many analysts expect growth to remain modest in the current quarter as state of emergency curbs re-imposed to combat a spike in infections weigh on household spending.
The world’s third-largest economy grew an annualised 1.3 per cent in April-June after a revised 3.7 per cent slump in the first quarter, preliminary gross domestic product (GDP) data showed on Monday (Aug 16), beating a median market forecast for a 0.7 per cent gain.
Still, the rebound was much weaker than that of other advanced economies including the United States, which marked a 6.5 per cent annualised expansion in the second quarter, highlighting the fallout from Tokyo’s struggle in containing the pandemic.
“There’s not much to be optimistic on the outlook with a spike in infections heightening the chance of stricter curbs on activity,” said Yoshihiki Shinke, chief economist at Dai-ichi Life Research Institute.
“Japan’s economy stagnated in the first half of this year and there’s a risk of a contraction in July-September. Any clear rebound in growth will have to wait until year-end,” he said.