Japan, the world’s third largest economy witnessed a jump in its Q1 growth figures, beating analysts’ expectations. This is expected to discourage the Bank of Japan Governor Kuroda to further pursue easing steps, to help revive the ailing economy. However, few believe that the rebound is not strong enough to generate hopes of revival of the crawling economy.
The Japanese Q1 gross domestic product grew by 1.7 pct at an annualized seasonally adjusted rate, against market hopes of a nominal 0.3 pct and compared to -1.1 pct in the previous quarter. In line with this, non-annualized GDP (seasonally adjusted) grew 0.4%, against analysts’ expectations of 0.1% and -.04% compared to last quarter.
Minutes after the GDP data was released, analysts have judged the high-than-expected figures as nominal, hoping the Kuroda-led central bank to ease policy in June, against a backdrop of poor economic conditions and weak inflation.
“The Japanese economy will continue its trend to recover on a moderate path with rebound in consumption likely to be behindQ1 GDP figures,” Reuters reported, citing Japan Economy Minister Shintaro Ishihara in a recent release.
The rise in GDP is attributable to the marginal rise in consumption expenditure by 0.5 pct beyond estimates of 0.2 pct and compared to 0.9 pct in the last quarter. This is on account of larger household spending on televisions, food and recreation. However, business spending hit a great miss, coming in at 1.4 pct q/q, against consensus of -0.8 pct and 1.5 pct previously.
The Japanese economy spurred hopes of growth just ahead of the G7 meeting, scheduled next week, where Prime Minister Shinzo Abe is expected to seek global co-ordination to help revive the ailing economy.
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