Japan’s economy grew at the fastest pace in nearly three years in the first quarter due to increased spending ahead of a sales tax increase on 1 April.
Official data showed GDP rose 1.5% in the January-to-March period, against a revised 0.1% in the prior quarter.
The figure beat forecasts for 1% growth, and was led by consumer spending which rose by 2.1%.
Capital spending by businesses also outperformed, rising by 4.9%, which was more than double analyst expectations.
Private consumption accounts for about 60% of Japan’s economy. However, economists warned that spending may taper off now that the April tax hike has been introduced.
“Japan’s economy expanded rapidly ahead of the sales tax hike, but is set to slump thereafter,” Marcel Thieliant, Japan economist at Capital Economics, said.
“Looking ahead, the economy will certainly contract in the second quarter of the year, as consumers rein in spending after the tax hike, and residential investment is set to plunge.”
via BBC
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Alfonso Esparza
Latest posts by Alfonso Esparza (see all)
- Market Awaits China Retaliation on Trade - 11/29/2019
- Alibaba to Close Order Book Ahead of Huge IPO - 11/18/2019
- Trump and Powell Met Monday to Discuss US Economy - 11/18/2019