TOKYO: Japan’s economy grew 0.5 percent in the first three months of 2017, its fifth straight winning quarter and the longest expansion in more than a decade, government data showed on Thursday.
Robust exports boosted gross domestic product, up from a 0.3 percent increase in the last quarter of 2016, the Cabinet Office said.
The latest reading matched market expectations.
The world’s number three economy has been picking up steam on the back of strong exports, with investments linked to the Tokyo 2020 Olympics also giving growth a boost. The labour market is tight and business confidence is high.
But consumer spending remains tepid and efforts to conquer on-off deflation have largely fallen flat despite years of monetary easing by the central bank. Individual spending accounts for more than a half of Japan’s GDP.
Private consumption picked up 0.4 percent from the preceding quarter after zero growth and the same 0.4 percent rise in the two preceding quarters.
The latest reading nonetheless means Japan’s economy has had its best string of gains since 2006, during the tenure of popular former prime minister Junichiro Koizumi.
The figures are good news for the 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 before Abe swept back to power in late 2012 on a pledge to reignite Japan’s 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 critics have been increasingly doubtful about the plan’s success in cementing a lasting recovery, as heavily-indebted Japan grapples with low birthrates and a shrinking labour force.
The Bank of Japan, aiming to create two-percent inflation as a key part the growth bid, now expects to reach that goal by 2019 — four years later than planned.
Still, the central bank and International Monetary Fund both recently lifted their projections for growth.
A weak yen has helped prop up the economy as it makes Japanese exports more competitive and inflates profits when overseas income is repatriated.
An improving global outlook with strong demand for Japanese smartphone parts, memory chips and construction machinery has also been a tailwind, analysts said. AFP