The Japanese economy accelerated in the second quarter of 2017 with cyclical growth of 1% and 4% on an annualized basis (the highest since 2006) driven by private consumption which rose by 0,9%. Corporate expenses, the Cabinet Office announced, rose for the eighth quarter in a row with +2,4%, while public investments increased by +5,1% in the wake of the economic stimulus package wanted by the government. Exports slip for the first time in the 4th quarter by 0,5%, while imports grow by 1,4%.
Japan's April-June quarterly growth of 1%, following January-March upward revision to 0,4% (from +0,3%), beat analysts' expectations by +0,6% and represents the largest increase since the first quarter of 2015. On an annualized basis, +4%, after the 1,5% recalculated upwards (from +1%) in the first three months of 2017, exceeds estimates by + 2,5%. The data underline the importance of the weight of domestic consumption in the formation of GDP: domestic demand rose by 1,3% and more than compensated for the slowdown in Asian demand.
Private consumption, which accounts for about 60% of gross domestic product, rose by 0,9%, extending growth to six consecutive quarters, thanks to the purchase of durable goods such as cars and air conditioners. Private residential investments stand at +1,5%, while non-residential investments at +2,4%. Public demand, which is another component of domestic demand, rose by 1,3%. In the July update of the World Economic Outlook, due to the recovery of the global economy, the International Monetary Fund slightly revised upwards its forecasts for Japan's GDP in 2017 to 1,3% (+0,1%) and confirmed the +0,6% of 2018.
