Japan Economy Recovers Faster than Expected in Second Quarter

Japan’s economy recovered faster than expected from its pandemic slump as easing of restrictions boosted consumer spending, but experts warn that the momentum may be dampened by new surges in COVID-19 infections.

Japan’s economic output grew by 0.3 percent in the second quarter, citing a 1.3 percent annual increase higher than the expected 0.66 percent. The growth followed an ease in lockdown restrictions as household and business spending was encouraged.

Analysts warn, however, that Japan’s growth will be modest in the following quarter as a state of emergency is reimposed amid new spikes in COVID-19 cases.

Economy Minister Yasutoshi Nishimura said that the increase in consumer spending from easing restrictions gave him “very mixed feelings” about Japan’s outlook, adding that preventing the virus’ spread should be prioritized.

“It’s very bad for the economy for this situation to drag on,” Nishimura maintained.

In the first quarter of 2021, Japan’s growth rate plummeted from 2.8 percent to negative 0.9 percent after the government struggled to contain the pandemic.

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