TOKYO – Japan’s gross domestic product (GDP) grew at an annual rate of 2.2 percent in the first quarter of 2017, thanks mainly to increased exports, domestic consumption and real estate investment, the government announced on Thursday.
Between January and March, the world’s third largest economy expanded by 0.5 percent over the previous quarter, according to data released by the Japanese Cabinet Office.
During the last quarter of 2016, Japan’s GDP was up 0.3 percent over the third quarter of the same year and 1.2 percent in annualized terms.
The GDP growth marks the fifth consecutive quarter of increase, the longest stretch in a decade and surpasses analysts’ expectations.
The growth in exports, which is one of the main components measuring the country’s GDP, boosted the Japanese economy during the first quarter of the year.
Export growth amounted to an annual rate of 8.9 percent, and 2.1 percent compared to the last quarter of the previous year.
Another component that contributed was the expansion of domestic consumption, which makes up almost 60 percent of the Japanese economy. The domestic consumption in Japan was up by 0.4 percent quarter-on-quarter after having remained flat in the previous quarter, and up 1.4 percent at an annual pace.
However, there is concern that spending may falter again, as wage increases are inconsistent, which is contrary to what the government wants in order to support households and allow a rise in prices.
Domestic demand also increased by 1.6 percent in annual terms and 0.4 percent quarter-on-quarter during the first quarter of 2017, after falling and remaining flat in the previous two quarters.
On the other hand, real estate investment grew at an annual rate of 3 percent and 0.7 percent quarter on quarter.
Corporate capital investment, another key component of the current economic strategy led by the government of Prime Minister Shinzo Abe to boost recovery, rose by 0.2 percent quarter on quarter after yielding a 1.9-percent rise between October and December 2016.
Corporate investment has been slowing down due to uncertainty in the global economy and yen appreciation, which shrinks remittances of major Japanese exporters.
The evolution of public investment, which is also among the pillars of growth in “Abenomics” – the economic reform policy advocated by Abe –, fell by 0.3 percent in annualized term and by 0.1 percent over the previous quarter.