Japan: growth gathers pace

CHART OF THE WEEK

Japan’s first-quarter growth came in ahead of expectations. GDP rose at an annualised 2.2% rate fuelled by healthy demand across the board. Household spending is picking up and partially offsetting slightly weaker export growth. Business investment is slowing but is balanced out by improving inventories.

OUR ANALYSIS

The faster growth figure is due in large part to inventory accumulation, which rose over the first three months after falling in the two previous quarters. With Japan’s PMI indices now settling at the historically comfortable level of around 52, growth is expected to remain buoyant and will likely drive 2017 forecasts higher. Since the start of the year, forecasts have already been revised up from 1.0% to 1.2%.

The opinion expressed above is dated May 22nd, 2017, and is liable to change

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Julien-Pierre Nouen

Directeur des études économiques et de la gestion diversifiée