Japan’s economy is likely to recover in the second quarter

A customer places a 10,000 yen bill on the checkout counter while making a purchase at an Akidai YK supermarket in Tokyo, Japan, on Monday, June 27, 2022.

Kiyoshi Ota | Bloomberg | beautiful pictures

A Reuters poll showed on Friday Japan’s economy is likely to bounce back in April-June from the previous quarter’s contraction thanks to steady consumer spending on in-person services. no longer hampered by coronavirus restrictions.

For the current quarter, however, analysts are concerned about increased risks, including the possibility of a global economic slowdown and a resurgence of Covid-19 cases in Japan.

The world’s third-largest economy is likely to grow at a 2.5% annual rate in April-June, recovering from a 0.5% contraction in the first quarter, according to 17-year average forecasts. economist.

The poll found that second-quarter growth mainly driven by private consumption is expected to rise 1.3%, accounting for more than half of Japan’s gross domestic product (GDP).

According to the poll, capital spending is likely to increase by 0.9%, also showing that external demand added 0.1 percentage point to GDP growth.

Saisuke Sakai, senior economist at Mizuho Research and Technologies, said the recovery in consumption since the lifting of Covid-19 restrictions in March boosted growth from April to June, said Saisuke Sakai. , senior economist at Mizuho Research and Technologies, who also pointed out that aggressive corporate investment has been delayed since last year.

All of this offset the negative impact on Japanese output from the lockdown in China, Sakai said.

But “Japan’s recovery rate will be slower in July-September as households may shift to vigilance amid the outbreak (new coronavirus), along with other downside risk factors, such as rising prices and a slowing global economy,” he added.

Separate data will likely show that Japan’s June current account balance marks its first deficit since January, as imports jumped. The median estimate is a shortfall of 703.8 billion yen ($5.29 billion).

The poll also showed wholesale prices in July were 8.4% higher than a year earlier, a pace of increase tapering for the third month. Wholesale price inflation hit a record 9.9% in April.

The government will release preliminary GDP data for April-June at 8:50 a.m. on August 15 (2350 GMT, August 14) and current account data at 8:50 a.m. on August 8. (2350 GMT, August 7).

The Bank of Japan will release wholesale price data at 8:50 a.m. on August 10 (23:50 GMT, August 9).

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