Japan's economy expanded at an annual rate of 2.9% in the April-June period, slightly lower than the initial report of 3.1% growth, according to revised government data released on Monday. The growth was driven by improved wages and spending, indicating positive momentum in the country's economic recovery.
Despite the growth, there are lingering risks that could impact Japan's economic performance. One major concern is the state of the U.S. economy, which has a significant influence on Japan's export-dependent economy. Additionally, political uncertainty looms in Japan as the ruling party prepares to select a new leader.
Several candidates are vying to succeed Prime Minister Fumio Kishida as the head of the Liberal Democratic Party. The winner of the party's upcoming vote on September 27 is expected to become the next prime minister, given the party's control of parliament.
In the first quarter of the fiscal year, Japan's GDP grew by 0.7%, marking a rebound from the contraction experienced in the previous quarter. The growth was supported by a 3.0% increase in domestic demand, fueled by strong household consumption, private sector investments, and government spending. Exports also saw robust growth, expanding by 6.1% during the period.
Japan's economic performance in recent quarters has been mixed, with a contraction of 0.6% in January-March followed by marginal growth of 0.1% in October-December last year.
Looking ahead, concerns persist about Japan's economic standing on the global stage. The International Monetary Fund (IMF) projects that Japan could slip to fifth place in the world economy rankings, trailing behind the U.S., China, Germany, and India if current growth trends continue.
