TOKYO / MENA Newswire / — Japan’s economy expanded for a second consecutive quarter in the January to March period, with inflation-adjusted gross domestic product rising an annualized 2.1 percent, according to preliminary government data released Tuesday. The result showed continued growth in the world’s fourth-largest economy, supported by exports, household spending and business investment.
Real GDP rose 0.5 percent from the previous quarter on a seasonally adjusted basis, the Cabinet Office said. The annualized figure, which shows how the economy would perform if the quarterly pace continued for a full year, followed a revised 0.8 percent annualized expansion in the October to December period. The latest reading exceeded market expectations for moderate growth.
Private consumption, which accounts for more than half of Japan’s economy, increased 0.3 percent from the previous quarter. The rise marked another positive contribution from household demand, while public demand also gained 0.3 percent. Capital expenditure by companies rose 0.3 percent, indicating that business investment remained positive during the first three months of the year.
Exports support quarterly expansion
External demand added to growth as exports rose 1.7 percent from the October to December quarter. The increase reflected stronger shipments in several goods categories, including autos, machinery and electrical devices used for industrial purposes. Imports rose 0.5 percent over the same period, leaving net trade as a positive contributor to overall growth.
Nominal GDP, which is not adjusted for inflation, increased 0.8 percent from the previous quarter, equivalent to an annualized gain of 3.4 percent. The gap between nominal and real growth reflected the continued effect of prices across the economy. Japan has been managing sustained cost pressures while wage growth and household purchasing power remain central indicators for domestic demand.
GDP data shows broader demand base
The Cabinet Office data showed that the expansion was not limited to one component of demand. Household consumption, capital investment, public demand and exports all increased on a quarter-on-quarter basis. The result contrasted with periods in which Japan’s growth has relied heavily on trade or temporary factors, although the preliminary figures remain subject to revision in the government’s next estimate.
Japan’s economy has faced pressure from higher import costs because the country depends heavily on overseas energy supplies. Oil and related product prices have remained an important cost factor for companies and households. The January to March data, however, covered a period in which stronger exports and steady domestic spending were sufficient to keep the economy growing for a second straight quarter.