Japan’s economy is expected to rebound in the second quarter from a first quarter contraction but slower growth in China will temper the pace, a senior official at the Cabinet Office said on Wednesday.
"The impact of the slowing Chinese economy on (Japan’s) economy will likely emerge in the second quarter,” the official told reporters without elaborating on how strongly the economy has been hit. The official added auto exports faced continued supply chain constraints but conditions were better than the fourth quarter of 2021, See: Japan Q1 GDP Contracted On Weak Spending, Exports-Analysts.
As well, uncertainties over the outlook for the global economy caused by Russia's invasion of Ukraine is expected to slow capital investment. Weak private consumption in the first quarter was mainly caused by the government’s quasi-emergency measures to curb the spread of Covid-19 than higher prices, he said.
But the official said consumer spending in the second quarter will be somewhat impeded by higher energy and food prices amid weak wage hikes.
Japan's Q1 GDP fell 0.2% q/q, or an annualized -1.0% following a revised +0.9% q/q, or an annualized revised +3.8% for the fourth quarter of 2021. The Q1 contraction was better than the MNI median forecast that pointed to a fall of 0.4% q/q, or an annualized -1.8%.
Japan's GDP in fiscal 2021 rose 2.1% y/y, improving from -4.5% strongly hit by Covid-19 in fiscal 2020.