Japan’s economy records longest expansion in a decade

TOKYO: Japan has posted its longest economic expansion in over a decade, government data showed yesterday, marking a win for Tokyo’s growth bid even though its battle to conquer deflation is still far from won.

The world’s number three economy grew 0.5% in the first quarter – or an annualised 2.2%. That was the fifth straight rise and up from a 0.3% expansion in the last quarter of 2016.

Japan’s prospects have been improving on the back of strong exports, with investments linked to the Tokyo 2020 Olympics also giving the economy a shot in the arm. The labour market is tight and business confidence is strong with firms investing more.

But consumer spending remains tepid and efforts to lift inflation have fallen flat despite years of aggressive monetary easing by Japan’s central bank.

Private consumption picked up a modest 0.4% in the first quarter from zero growth in the previous three months. Individual spending accounts for more than a half of Japan’s gross domestic product.

“I can’t give the ‘all clear’ yet,” said Takeshi Minami, chief economist at Norinchukin Research Institute here.

“Public works spending is helping prop up growth this year but it’s tough to imagine that private spending is going to be a driving force for the economy.”

The latest reading nonetheless means Japan’s economy has had its longest string of gains since 2006, during the tenure of popular former prime minister Junichiro Koizumi. – AFP