MNI BRIEF: Japan Q1 GDP Posts First Rise in Three Quarters

Japan's economy in Q1 posted its first growth in three quarter due to strong private consumption and capital investment, preliminary GDP data released by the Cabinet Office Wednesday showed.

Q1 GDP rose 0.4% q/q , or an annualised 1.6%, following a revised 0.0% q/q, or an annualised revised fall of 0.1%, for Q4 2022. Q1 growth was stronger than the MNI median forecast that pointed to a rise of 0.2% q/q, or an annualised 0.6%. Private consumption, which accounts for about 60% of Japan's GDP, rose 0.6% q/q in Q1, after a revised 0.2% in Q4. The median forecast was for a 0.4% q/q rise.

Business investment rose 0.9% q/q in Q1, the first rise in two quarters following a revised drop of 0.7% in Q4. The median forecast was for a 0.3% fall. Net exports of goods and services – exports minus imports – made a negative 0.3pp contribution to total domestic output after pushing Q4 GDP growth up 0.4pp. Exports fell 4.2% q/q in Q1 after rising 2% q/q in Q4. Imports fell 2.3% in Q1 after recording 0.0% the previous quarter.

Private-sector inventories contributed a 0.1pp to Q1 GDP following a 0.5pp decline in Q4, while public investment rose 2.4% q/q, contributing 0.1pp to GDP. Japan’s GDP in fiscal 2022 rose 1.2% y/y for the second straight rise following a 2.6% gain in fiscal 2021.