Japan’s Q2 GDP beats forecasts as exports zoom

Summary

• April-June GDP growth at +6.0% annualised, +1.5% q/q
• Exports drive Q2 growth, consumption falls
• Solid GDP good news for policymakers

Japan’s Q2 GDP beats forecasts as exports zoom

TOKYO, Aug 15 (Reuters) – Japan’s economy grew much faster than expected in April-June, as brisk auto exports and tourist arrivals helped offset the drag from a slowing post-COVID consumer recovery, although global recession prospects cloud the outlook.

The 6.0% annualised growth in Japan’s economy translated into a quarterly gain of 1.5%, much bigger than median estimates of 0.8% in a Reuters poll and bringing gross domestic product (GDP) to a record high.

Fastest Expansion in Two Years

It was the fastest expansion since the final quarter of 2020 and followed a revised 3.7% expansion in January-March.

While the headline GDP data provides some relief to policymakers seeking to balance economic growth with sustainable inflation, it masks underlying weakness in the household sector.

Key Factors Driving Growth

Marcel Thieliant, head of Asia-Pacific at Capital Economics, said the export-driven momentum in growth is unlikely to be sustained.

“And while capital goods exports bounced back in June as the largest falls in overseas investment are now behind us, we do not expect a vigorous recovery,” Thieliant said.

Private consumption, which makes up more than half of the economy, fell 0.5% quarter-on-quarter in the April-June period, as price hikes hit sales of food and household appliances.

Exports expanded 3.2% in the second quarter led by car exports and inbound tourism, while capital expenditure was flat.

Japanese automakers have benefited from a weaker yen, which has helped prop up profits amid declining sales in China and an increasingly tough shift to electric vehicles.

Strong

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 12: Responsible Consumption and Production
• SDG 17: Partnerships for the Goals

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7% GDP growth per annum in the least developed countries.
• SDG 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries.
• SDG 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
• SDG 17.17: Encourage and promote effective public, public-private, and civil society partnerships, building on the experience and resourcing strategies of partnerships.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• GDP growth rate (annualized and quarterly)
• Exports growth rate
• Private consumption growth rate
• Capital expenditure growth rate
• Net exports contribution to growth

Table: SDGs, Targets, and Indicators

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Source: reuters.com

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