Japan posts weak Q1 growth, but recovery seen

TOKYO: Japan on Thursday posted lower-than-expected growth in the first quarter, but official data still confirmed that the country saw its longest economic expansion in over a decade.
The world’s number three economy grew 0.3 per cent growth between January and March — or 1.0 per cent at an annualised rate — which was down from a preliminary 0.5 per cent growth estimate.
The unexpected downgrade was also below market expectations for an upward revision to 0.6 per cent growth.
The surprise cut comes after the International Monetary Fund and World Bank both recently lifted their projections for Japan’s economy.
Still, the official figures also meant that Japan saw its fifth straight quarter of growth in what is its longest economic expansion in more than a decade.
The economy has been picking up steam on the back of strong exports as demand for Japan-made products picks up. Investment linked to the Tokyo 2020 Olympics is also giving the economy a shot in the arm.
“The latest figures fell short of the projections, but we’ve not changed our view that Japan’s economy is on a recovery path,” said Yasuhiro Takahashi, a senior economist at Nomura Securities.
The downward revision was mostly due to firms working down their inventory stockpiles, curbing new production during the first three months of the year, he said. “If you look at production data from April onward it’s been good… so one doesn’t need to be too pessimistic.”
Separate data on Thursday showed Japan’s current account rose 7.5 per cent on-year to 1.95 trillion yen ($17 billion) in April.— AFP