The second quarter of Japan’s economy has joined the turnaround seen across G7 countries as the lockdown restriction eases. The consumers were seen rushing to the shops after relaxation in the lockdown.
The world’s third-largest economy returned to health with a surge in exports. Japan beats the expectation of City analysts by capitalizing on global trade’s return. The first quarter saw a drop of 0.9% after which the economic output expanded to 0.3% in the second quarter, or by 1.3% using the annualized calculation which is more commonly cited by Tokyo. However, the analysts expected the annualized growth to be only 0.7%.
The emergency which was imposed in the final days of the Olympics summer games to tackle the Delta Variant had dampened the momentum in the third quarter. A surge in the new variant of COVID-19 in Asia has caused supply chain disruptions to some of the Japanese manufacturers. This could weigh on factory output and add gloom for an already fragile recovery.
Yoshiki Shinkle who is the chief economist at Dai-ichi Life Research Institute said that there is not much to be optimistic on the outlook with the spike in infection heightening the chance of stricter curbs on activity.