Japan Jan.-March GDP Up Annual 2.1 Pct

Tokyo, May 19 (Jiji Press)–Japan’s gross domestic product in January-March grew 0.5 pct from the previous quarter, or an annualized 2.1 pct, after price and seasonal adjustment, the Cabinet Office said Tuesday. The country marked a second straight quarter of economic expansion as private consumption grew and automobile exports recovered from their sluggishness caused by high U.S. tariffs. For the whole of fiscal 2025, the country’s real GDP increased 0.8 pct from the previous year, reflecting growing demand for semiconductors, according to preliminary data. Nominal GDP rose 4.2 pct to 669.97 trillion yen. In January-March, private consumption, the biggest component of domestic demand, climbed 0.3 pct for a fifth consecutive quarterly gain, supported by spending on dining out and clothing following a slowdown in consumer inflation. Spending on tobacco products rose on last-minute demand ahead of a tax hike. However, lower electricity bills due to warmer-than-usual weather in February and March partly offset the private consumption expansion. Corporate capital spending rose 0.3 pct for a second consecutive quarterly increase, driven by brisk research and development investment and spending on general-purpose machinery. Housing investment rose 0.5 pct, also up for the second straight quarter, recovering from a drop in demand that followed a last-minute demand surge spurred by materials price and energy-saving standard revisions. Public investment advanced 1.4 pct. Exports rose 1.7 pct for a second consecutive quarterly gain, buoyed by strong demand for automobiles, ships and business-oriented machinery as well as research and development services. Imports, a negative factor for GDP, increased 0.5 pct, the first rise in three quarters, reflecting stronger demand for research and development services. Nominal GDP expanded 0.8 pct, or an annualized 3.4 pct. “An improvement in the employment and income environment and the effects of various policies are expected to support the gradual recovery of the economy,” economic and fiscal policy minister Minoru Kiuchi told a press conference. Looking ahead, he pointed to the need to closely watch the impact of the Middle East situation. END [Copyright The Jiji Press, Ltd.]