Japan’s economy resumes growth in the second quarter
Japan’s economic dynamics
Sign up for myFT Daily Digest and become the first person to learn about the Japanese Economic News.
The Japanese economy resumed growth in the second quarter of 2021, but due to the sudden increase in Covid-19 cases, the rebound is still weak.
Economic output fell by 0.9% and then increased by 0.3% month-on-month In the first quarterThe economy grew at an annual rate of 1.3%, beating analysts’ expectations of 0.7%.
Compared with Western developed countries, the world’s fourth-largest economy is slower to rebound from the coronavirus pandemic Vaccination schedule Only recently has it started to pick up pace.
On Monday, economists warned that there is a risk of contraction in the third quarter as the government considers implementing stricter restrictions in major cities across the country. Control spread Covid infection.
“The downside risks in the July-September quarter are actually increasing, so it is difficult to be optimistic about the outlook,” said Yoshiki Shinke, chief economist of the First Life Research Institute.
“The gap with other advanced economies widened in the second quarter, but this situation may remain the same in the July-September quarter,” he added.
Despite a slight rebound in the second quarter, Japan’s gold medal count hit a record high, but the Tokyo Olympics is unlikely to boost consumption since the hosting of the Olympics Behind closed doors Two weeks from July 23.
During the Olympics, the number of Covid-19 cases in Japan tripled to more than 15,000 cases per day, and the total number exceeded 20,000 for the first time last week.
In order to curb the rapid spread of the Delta variant, the government was forced to extend its State of emergency In Tokyo and other areas until the end of this month.
According to data released by the Cabinet Office on Monday, after a 1% decline in the first quarter, private consumption grew by 0.8% in the second quarter, higher than expected.
Exports and business investment also contributed to the recovery in the April-June quarter, increasing by 2.9% and 1.7%, respectively.
Goldman Sachs chief economist Naohiko Baba pointed out that compared with the increase in new infections, the number of severe cases and deaths is limited. He said that the emotional boost brought by the increase in vaccination rates should be realized in the next few months.
“As the impact of vaccination becomes more pronounced, we predict that pent-up demand will especially appear in the fourth quarter,” Baba said, estimating the actual GDP growth rate in the last three months of 2021 to be 8.4%.
Coronavirus business update
How does the coronavirus affect the market, business, and our daily lives and workplaces? Keep up to date with our coronavirus newsletter. Register here