Japan’s economy expanded faster than anticipated in the first quarter, with annual GDP growth of 1.6%, according to data released on Wednesday, as a rebound in consumption post-Covid diminished global challenges.
After a revised 0.1% drop in the fourth quarter last year, this represented the first quarterly increase in three quarters. It was also significantly higher than the median market projection of 0.7% growth.
However, growing indications of a slowdown in U.S., European, and Chinese growth overshadowed the outlook for the export-reliant economy, raising uncertainty as to how soon the central bank will be able to phase out its massive stimulus program.
More than half of economic activity comes from private consumption, which increased by 0.6% from the previous quarter as the country resumed normal operations after the pandemic. That was far quicker than the predicted gain of 0.4%.
After two and a half years of Covid restrictions that crushed the economy, Japan reopened its borders to foreign tourists in October.
The first three months of 2023 saw roughly five million visitors to Japan, which is still much less than the eight million who came to the country during the same time in 2019, a record-breaking year for inbound tourism to Japan.
