Japan's economy stages modest bounce from Covid jolt, global outlook darkens
Japan's economy rebounded at a slower-than-expected pace in the second quarter from a Covid-induced slump, data showed on Monday, highlighting uncertainty on whether consumption will grow enough to bolster a much-delayed, fragile recovery.
While rising consumption propped up April-June growth, the outlook has been clouded by a resurgence in infections, slowing global growth, supply constraints and rising raw material prices that are boosting households' living costs.
The world's third-largest economy expanded an annualized 2.2% in April-June, government data showed, marking the third straight quarter of increase but falling short of median market forecasts for a 2.5% gain.
The growth was driven largely by a 1.1% gain in private consumption, the data showed, as businesses re-opened after the lifting of pandemic-related curbs on economic activity.
Capital expenditure, another key driver of April-June growth, increased 1.4% from the previous quarter, exceeding a median market forecast for a 0.9% expansion, the data showed.
Domestic demand added 0.5% point to GDP growth, while external demand neither added to, nor shaved off from growth.
Japan has lagged other major economies in fully recovering from the pandemic's hit due to weak consumption, blamed in part on curbs on activity that lasted until March. That has turned the Bank of Japan (BOJ) into an outlier in the global monetary tightening phase sweeping across many economies amid surging inflation.