TOKYO- Japan’s economy expanded an annualized 1.6 percent in the January-March period to mark the first increase in three quarters, data showed on Wednesday, as a post-COVID rebound in consumption offset global headwinds.
But mounting signs of a slowdown in US, European and Chinese growth clouded the outlook for the export-reliant economy, heightening uncertainty on how soon the central bank can phase out its massive stimulus program.
The increase in gross domestic product (GDP) was much bigger than a median market forecast for a 0.7 percent gain, and followed a revised 0.1 percent fall in the final quarter of last year, government data showed.
Private consumption, which makes up more than half the economy, grew 0.6 percent in January-March from the previous quarter, as the country’s re-opening from the pandemic boosted service spending. That was faster than forecasts of a 0.4 percent increase.
Capital expenditure was up 0.9 percent, dashing expectations for a 0.4 percent fall, the data showed.
External demand, or net exports, shaved 0.3 of a percentage point off GDP, highlighting the strain on manufacturers from slowing overseas growth.
While a delayed recovery in spending from the removal of COVID-related curbs is underpinning growth, sluggish global demand and the hit to households from rising living costs cloud the outlook for a sustained recovery. -Reuters
