Tokyo
Japan’s economy grew at a stronger-than-expected rate in the second quarter, official data showed, the third straight period of expansion for the world’s third-largest economy. Gross domestic product (GDP) grew 0.4 percent from the previous quarter, the Cabinet Office said, beating economists’ median forecast of 0.1 percent. The economy was supported by domestic demand thanks to the longer-than-usual holidays for the May 1 enthronement of the new emperor as well as a rush in demand ahead of an expected sales tax hike in October, economists said. Corporate investments in plants and equipment also grew but exports slumped amid trade frictions between the United States and China. The continued growth is likely to bolster controversial plans by Prime Minister Shinzo Abe’s government to hike sales tax from eight percent to 10 percent on October 1. Some economists have warned against raising the tax amid global economic uncertainties such as the US-China trade war and Brexit. But Tokyo has insisted it will carry out the plan unless there is a crisis on the level of the 2008 financial meltdown. The previous sales tax hike to eight percent, from five percent, in 2014 hit consumption and was blamed for a slump in the Japanese economy.—AFP
