- Mizuho Research Institute
Japan's economy grew at the fastest pace in a year in the first quarter, led by a leap year consumption boost. Nevertheless, analysts said the rebound was not strong enough to fan concerns over a contraction in this quarter. The world's third biggest economy expanded 0.4% in the first quarter, according to Japan's Cabinet Office, coming in above economists' forecast for a 0.1% expansion and marking the strongest rate of growth since the March 2015 quarter. Measured on an annual basis, Japan's economy grew at a rate of 1.7% in the reported period, easily overshooting expectations of a 0.3% gain. Increasing gross domestic product reverses a contraction in the fourth quarter of 2015 and means Japan has escaped another technical recession, defined as two quarters of negative growth in a row.
Private consumption, which accounts for 60% of GDP, increased 0.5%, more than double the median market forecast, as households boosted spending on televisions, food and beverages, and recreation. Yet the rebound failed to offset a 0.8% decline in the previous quarter. Nevertheless, consumption added 1 percentage point to annualized growth, government consumption contributed 0.6 percentage points and trade chipped in 0.8 percentage points of growth.
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