TOKYO (AP) 鈥� Japan鈥檚 economy grew at an annual rate of 2.2% for the April-June quarter from the previous quarter, the government said Monday, as consumer spending rebounded with COVID-19 restrictions getting gradually lifted.
Japan鈥檚 gross domestic product, or GDP, the sum of the value of a nation鈥檚 products and services, expanded 0.5% from January-March, during which the economy had stayed flat, according to the Cabinet Office鈥檚 preliminary estimates.
Economists had forecast 0.6% on-quarter growth.
The annual numbers show how the economy would have grown if the quarterly rate were to continue for a year.
Private consumption jumped at an annual rate of 4.6%. Public investment rose at an annual rate of 3.8%. Exports gained 3.7%, while imports grew 2.7%, both annual rates.
One major risk for the world鈥檚 third-largest economy has been higher prices, especially in the energy sector, brought on by global inflation. Russia鈥檚 war in Ukraine has pushed already high energy prices still higher, a major negative for resource-poor Japan.
The Japanese yen has weakened to two-decade lows against the dollar, recently trading at about 135 yen to the dollar, making imports relatively more expensive. After the release of GDP data, the dollar was trading at about 133 yen.
On the plus side, the weak yen works as a plus for Japan鈥檚 giant exporters like Toyota Motor Corp. by boosting the value of overseas earnings when translated into yen.
The coronavirus pandemic is another factor. Japan鈥檚 last government-backed restrictions to try to curb infections ended in March.
COVID-19 cases have surged dramatically in recent months to record highs in some areas 鈥� a jump attributed to the greater availability of tests, more transmissible variants and a segment of the population being under-vaccinated despite the shots being readily available.
Some analysts think Japan鈥檚 economic growth will drop again in the July-September period.
鈥淎fter a much brighter spring, we think the economy will slow again this quarter on the back of weaker consumer spending due to rising COVID-19 infections,鈥� said Takayuki Toji, economist at SuMi TRUST.
鈥淓xports should be supported by the lifting of the urban blockade in China and capital investment should remain firm but slowing global growth due to monetary tightening in the U.S. and Europe will take its toll.鈥�
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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
Yuri Kageyama, The Associated Press
