TOKYO: Japan’s economy grew 0.6 percent in the second quarter, official data showed Friday, marking the longest period of expansion in more than a decade for the world’s third-largest economy.
The latest figure was revised down from an initial estimate of 1.0 percent but was still a strong performance from the Asian powerhouse economy, analysts said.
Japan’s economy has been picking up steam, mainly on the back of surging exports including smartphone parts and memory chips, with investments linked to the Tokyo 2020 Olympics also giving growth a boost.
Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute, said that strong growth was likely to continue, although concerns over North Korea would linger.
“Looking ahead — of course we have the North Korean issue which is hard to predict — but otherwise no urgent worries or risks so the economy will likely continue picking up,” he told AFP.
The economy grew at an annualised rate of 2.5 percent and was driven by robust domestic demand and corporate investment, which offset a quarterly decline in exports.
But corporate investment was much weaker than the preliminary figures, with the latest data showing 0.5 percent growth, compared with a 2.4 percent preliminary figure.
Japan’s labour market is tight and business confidence is high but efforts to lift inflation have largely fallen flat despite years of aggressive monetary easing by the Bank of Japan.
The latest reading nonetheless means the economy has had six consecutive quarters of growth —its best string of gains since the tenure of popular former prime minister Junichiro Koizumi.
The annualised growth rate was impressive given that Japan’s potential growth is said to be around one percent or less, Shinke noted.
Friday’s numbers are upbeat news for current prime minister Shinzo Abe—whose brief and underwhelming first term as Japan’s premier came directly after Koizumi.
A string of short-term leaders followed Abe’s first term before he swept back to power in late 2012 on a pledge to reignite the once-booming economy with a plan dubbed Abenomics.
The scheme—a mix of huge monetary easing, government spending and reforms to the economy—stoked a stock market rally and fattened corporate profits.
But some critics have cast doubt on the plan, as heavily indebted Japan grapples with low birthrates and a shrinking labour force.
Friday’s data showed private consumption, which accounts for more than half of GDP, picked up 0.8 percent in the second quarter, compared with a 0.9 percent rise in the preliminary estimate.