The Strategist

Japanese GDP returns to growth

08/17/2021 - 10:33

Japan's GDP grew by 1.3% in the second quarter compared with the same period last year. This was higher than analysts' forecasts, who expected growth of only 0.7%.

The country’s GDP increased by 0.3% compared with the first quarter. Thus, the Japanese economy returned to growth after declining in the first quarter, when annualized GDP fell by 3.7% and quarterly GDP decreased by 0.9%.

However, economists fear that the period of growth may not last long - they are concerned about the increase in new cases of COVID-19 infection. "We're not very optimistic about the near-term outlook because an increase in new infections increases the chances of new restrictions," Reuters quoted Yoshihiki Shinke, chief economist at the Dai-ichi Life Research Institute, as saying.  The Japanese economy experienced stagnation in the first half of the year. So we can't expect signs of a clear recovery until the end of the year at the earliest."

"I have mixed feelings about these GDP results. They show that households' appetite for consumption is very high, despite restrictive measures due to the emergency situation," said Japanese Economy Minister Yasutoshi Nishimura. It is very bad when this situation in the economy continues and thus pulls it back”.