Despite trade war with South Korea, Japanese economy growth much faster than expected in April-June to mark the third straight quarter of expansion, as robust private consumption and business investment offset the hit to exports from cooling global demand.
The GDP of Japan growth at an annualized 1.8% in the second quarter, data released by Government of Japan on Friday, far exceeding a median market forecast for a 0.4% increase. It followed a revised 2.8% gain in January-March.
Private consumption, which accounts for about 60% of the economy, rose 0.6% from the previous quarter to mark the third straight quarter of increase, thanks to brisk demand for cars and air conditioners, a government official told reporters.
Capital expenditure increased 1.5%, accelerating from a 0.4% rise in January-March and beating a median market forecast for a 0.7% gain, as companies invested in streamlining operations in the face of labor shortages.
Office building construction and public works projects drove the strength in capital expenditure, analysts said, a sign the economy’s resilience was underpinned by those sectors less affected by slowing global trade.
This data under score Bank of Japan’s view that third-largest economy of the world after United States and China will continue to expand moderately, as solid household and corporate spending ease the pain from soft global demand.