The second-quarter result followed growth of 0 percent — revised from an initial reading of a 1 percent decline — during the first three months of the year, when consumers retreated to their homes in the face of the rapid spread of the Omicron variant.
The new growth report indicates that Japan’s economy may finally be back on track after more than two years of yo-yoing between growth and contraction.
The second-quarter growth came despite stiff headwinds, particularly for Japan’s small- and medium-size enterprises.
The growth was driven in part by spending to improve companies’ sustainability and digital infrastructure — efforts strongly promoted by government policies, said Wakaba Kobayashi, an economist at the Daiwa Institute of Research.
Still, it is not clear how long that growth can continue, she said.
Among many businesses, “there is a sense that the global economy is going to continue to decelerate,” she said.
And, she said, “for manufacturing and exports we expect a slowdown in momentum reflecting the fact that we expect global growth to be weaker.”.
Despite some positive signs, it will still take some time for Japan’s economic activity to normalize, said Shinichiro Kobayashi, a senior economist at Mitsubishi UFJ
But even at that time, it was in a weakened state after a rise in Japan’s consumption tax drove down spending