by Tetsushi Kajimoto and Kantaro Komiya

TOKYO (Reuters) – Japan’s economy grew faster than estimated in the second quarter as auto exports and tourism helped offset a slowing consumer recovery, but global recession fears are clouding the outlook.

The gross domestic product (GDP) of the world’s third largest economy grew by 6.0% over one year after growth of 3.7% in the first quarter (revised from +2.7%).

This is the fastest progress since the last quarter of 2020.

Quarter-on-quarter, Japan’s economy grew 1.5%, while analysts polled by Reuters had expected a quarterly rise of 0.8%.

While these preliminary data provide some relief to policymakers looking to balance economic growth with sustained inflation, they mask the underlying weakness in household consumption.

Marcel Thieliant, head of the Asia-Pacific region at Capital Economics, believes the export-led growth momentum is unlikely to continue.

“Even though capital goods exports rebounded in June as the biggest falls in outbound investment are now behind us, we don’t expect a strong recovery,” he said.

Private consumption, which accounts for more than half of the economy, fell 0.5% quarter-on-quarter between April and June, as price increases hit sales of food and home appliances.

Exports increased by 3.2% in the second quarter, thanks to the automotive sector and domestic tourism, while investment spending remained stable.

Japanese automakers were able to rely on a weaker yen which helped support earnings amid falling sales in China and a difficult transition to electric vehicles.

Strong American and European demand also supported exports, as did the explosion in the number of foreign tourists.

(Report Tetsushi Kajimoto and Kantaro Komiya; Kate Entringer)

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