Japan’s economy hits more than expected numbers in the second quarter, without being affected by growing global trade tensions. According to government figures released Friday, the economy expanded at an annualized pace of 1.9 percent in the second quarter.
The results were supported by improved household spending and rebounding from a contraction in the first quarter of the year.
Japan’s rate of growth on an annualized basis beats analysts’ expectations of an annualized pace of 1.4 percent following a revised 0.9 percent world’s third-largest economy contraction in the first quarter.
The data publically revealed as Japan’s Minister for Economic Revitalisation Toshimitsu Motegi discussed trade between increasing trade tensions with the US Trade Representative Robert Lighthizer in Washington on Thursday.
“Growth isn’t as vigorous as last year,” Marcel Thieliant, senior Japan economist at research firm Capital Economics, said in a note to clients. “Firms are facing severe labor and capacity shortages that make it difficult to sustain above-trend growth,” Thieliant added.
The figures show gross domestic product grew 0.5 percent, more than analysts’ expectations of 0.3 percent increase, compared to the previous quarter.
Private consumption largely contributed to the April-June growth, increasing 0.7 percent, while analysts expected a 0.2 percent increase.
“While real GDP growth in Q2 was both strong and higher than the consensus forecast, we believe it is reasonable to conclude that growth momentum for the Japanese economy as a whole is gradually starting to slow,” Nomura stated in a research note.