Japans economy grows at slower-than-expected rate as private consumption falls
Japan’s economy grew at an annualized rate of 1.1% in the April-June quarter, according to government data released Monday. The seasonally adjusted real GDP expanded 0.3% from the first quarter, down from a 2.1% annualized rate in January-March .
Private consumption, which accounts for more than half of economic output, fell 1.2% compared with the previous quarter, while exports rose 0.5%. Exports were driven by global demand for Japanese autos and semiconductors, with automakers like Toyota Motor Corp. and Honda Motor Co. benefiting from interest in AI-related technologies . Government spending increased 1.6%.
The growth rate missed analyst forecasts, which had expected a 2.0% annualized expansion and a 0.5% quarterly rise . Business investment declined 1.2%, and higher energy costs—partly due to the war in Iran—weighed on consumer spending. The conflict has disrupted oil shipments through the Strait of Hormuz, pushing Brent crude prices to around $88 a barrel, up from $65 a year ago .
A weak yen has bolstered exporters by increasing the value of overseas earnings but has also raised import costs, contributing to higher prices for consumers. Prime Minister Sanae Takaichi’s approval ratings have declined amid concerns over stagnant wage growth and rising living costs .
The Bank of Japan has closely watched consumption and wage trends as it considers further interest rate adjustments . The economy has now recorded three consecutive quarters of growth, following a revised 1.9% expansion in the first quarter.
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