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Japanese economy grows 1.5% in Q2

Posted August. 16, 2023 08:10,   

Updated August. 16, 2023 08:10


The Japanese economy was reported to grow 1.5% in the second quarter compared to three months earlier. The economy is growing at a pace faster than expected, driven by export recovery and foreign travelers visiting Japan. If the pace of growth continues throughout the year, the annual growth rate is estimated to reach 6.0%. If the growth rate materializes, Japan’s economic growth rate is expected to surpass that of Korea in 25 years since the Asian financial crisis in 1998.

According to actual GDP statistics announced by the Japanese Cabinet on Aug 15, the country’s second-quarter GDP increased by 1.5% from the previous quarter, doubling estimations by leading economic analysts. The annualized quarterly growth rate is 6.0%, the highest in two and half years since Q3 2020 (annualized growth rate of 7.9%) when it temporarily surged as a base effect of the COVID-19 recession.

According to Korea Center for International Finance, eight investment banks including Goldman Sachs and JP Morgan estimated Korea’s annual economic growth rate at 1.1% on average. Japan’s estimated growth rate is 1.4%. The Korean government and the Bank of Korea are expecting the economy to recover in the second half, due to China’s economic reopening and semiconductor business recovery. Some view, however, that possibility of deflation in China and ongoing interest rate hike in key economies would make economic recovery unlikely to happen this year.