Japan's economy grows in the first quarter
Japan’s GDP grew, to much surprise, in the first quarter of the year as export numbers exceeded expectations.
Data released earlier by the Cabinet Office showed that annualised growth came in at 2.1% during the period between January and March, which surpasses the expected 0.2% projected by analysts and well past the 1.6% figure of the last quarter of 2018.
On a quarter-on-quarter basis, Japan’s economy increased by 0.5% against the consensus amongst analysts whom were expecting a flat line.
This could serve as a springboard for the current government as it seeks to go ahead and increase the country’s sales tax from 8% to 10%, something which is not too popular amongst Japan’s citizens and is currently scheduled to be announced later in October.
However, caution must be exercised as the last time Japan’s government attempted this feat in 2014, sales tax was increased from 5% to 8%, the country entered recession.
Although a positive sign, Japan’s GDP report for the first quarter can be unreliable as it is based on limited source data, while the second reading which is due on June 10, often leads to large revisions.
Source: Smart Trend Team
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