by Tetsushi Kajimoto and Leika Kihara
TOKYO (Reuters) – Japan’s economy grew 1.6% year on year in the first quarter, government data showed on Wednesday, as the post-COVID recovery offset headwinds from the global economy.
Signs of an economic slowdown in the United States, Europe and China, however, have clouded Japan’s export-dependent economic outlook and heightened uncertainty about when Japan’s central bank may begin to end its very accommodating monetary policy.
Japan’s gross domestic product (GDP) far exceeded analysts’ expectations of 0.7% year-on-year growth, after a final reading contraction of 0.1% in the previous quarter.
Private consumption, which accounts for more than half of Japan’s GDP, rose 0.6 percent in the first quarter as the reopening of the economy after the COVID-19 pandemic boosted the service sector. Analysts were expecting a 0.4% rise.
Capital expenditure rose 0.9%, while analysts expected a decline of 0.4%.
External demand, penalized by the slowdown in growth abroad, subtracted 0.3 percentage point from growth.
(Report Tetsushi Kajimoto and Leika Kihara; Camille Raynaud)
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