Japan’s economy expanded faster than expected in Q1, driven by stronger private consumption and external demand.
Japan’s preliminary Q1 GDP grew at a 2.1% annualized rate, exceeding the 1.7% forecast and marking an acceleration from the prior quarter’s 1.3%. Quarter-on-quarter growth reached 0.5%, up from 0.3% in Q4 2023 and above the 0.4% estimate.
Private consumption rose 0.3% quarter-on-quarter, matching expectations and the previous quarter’s pace. Capital expenditure increased 0.3%, rebounding from a 1.3% contraction in Q4, while external demand contributed 0.3% to growth after a flat prior period.
The data suggests resilience in domestic demand and trade, supporting the Bank of Japan’s cautious stance on policy normalization.