Japan reports that its economy grew at a faster-than-expected 2.2 percent annual pace in January-March. Economists had forecast a strong expansion in the first quarter for the world’s third-largest economy, helped by a recovery in exports and consumer spending. But most estimates had not topped 2 percent.
The figures released Thursday are preliminary and likely to be revised.
The economy grew at a 1.2 percent pace in the last quarter of 2016.
Recent data suggest a weakening of corporate spending on factory equipment that may pull growth lower in the current quarter.
”Japan’s economy is on its longest streak of expansion in more than a decade,” Marcel Thieliant of Capital Economics said in a commentary. ”However we expect a slowdown in the second half of the year,’ he said.
On a quarterly basis, the economy expanded 0.5 percent in January-March.
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Japan’s central bank is pumping trillions of yen (tens of billions of dollars) into the economy each month through asset purchases to counter deflation and boost growth. That has kept the economy growing, but generally at a slower pace than hoped for.
Economists say that lagging growth in wages is hindering the recovery. Unemployment has dipped to levels not seen since the early 1990s, but instead of boosting salaries, companies have tended to hire more part-time or temporary workers at lower wages to save on costs.
Major corporations are investing more heavily abroad, in markets that promise faster growth than in aging Japan, where the population is shrinking.
Construction in preparation for the 2020 games is expected to pick up in the coming year, though the BOJ has estimated it will contribute only a fraction of a percentage to GDP growth in 2018.