Japan's economy bounced back ahead of the Olympics, data shows

17th Aug,2021

Japan's economy bounced back ahead of the Olympics, data shows


In the first half of this year, the world's third-largest economy grew at double the rate predicted. However, analysts have predicted that growth will be limited this quarter, after the reintroduction of a state of emergency to combat a surge in Covid-19 infections. Meanwhile, fresh data indicates that its larger neighbour, China, is losing speed in terms of economic recovery. According to preliminary statistics, Japan's gross domestic product (GDP) increased by 1.3 percent on an annualised basis in the second quarter of the year. This followed a drop of 3.7 percent in the preceding three months. The new numbers were considerably better than the projected rise of 0.7 percent, and they occurred as consumer and corporate spending recovered from the coronavirus's early impact. However, Japan's recovery is slower than that of other advanced nations, such as the United States, which saw its GDP rise by 6.5 percent in the second quarter of this year. The government's attempt to manage the epidemic is reflected in Japan's comparatively poor recovery. This GDP number gives me a lot of mixed feelings "After the report was announced, Economy Minister Yasutoshi Nishimura remarked. Our top objective is to stop the virus from spreading. This scenario is really awful for the economy, and it's just going to get worse "Added he. Japan's GDP contracted by more than 4.8 percent in 2020, its first contraction in almost a decade. Exports helped the country's economy recover from the pandemic's first hit last year, while the delayed deployment of its vaccination programme and a series of state-of-emergency measures hampered consumption. At the same time, a surge in instances of the Delta variety in other areas of Asia has thrown several Japanese businesses' supply networks into disarray. This may stifle manufacturing output and jeopardise the fragile recovery. On Monday, Japan's Nikkei stock index fell 1.6 percent in Tokyo, marking the third straight day of losses. In China, manufacturing output and retail sales both increased more slowly than predicted last month compared to the same month a year earlier. It's the latest evidence that the world's second-largest economy's recovery is stalling, as export growth slows and new Covid-19 outbreaks hamper operations.