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Japan’s Economy Rebounds After Previous Contraction

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Japan’s economy, the world’s third-largest, grew in the second quarter after contracting in the year’s first quarter. This is mainly because people were again more willing to make large purchases. In addition, Japanese companies also increased their investments.


From April to June, the economy grew by 0.3 percent compared to the first quarter, when there was still an adjusted contraction of 0.9 percent. This enabled the Asian country to avoid a recession. In addition, growth was somewhat stronger than economists had expected.

The economic figures are a windfall for Japanese Prime Minister Yoshihide Suga. His policy is mainly aimed at limiting the economic damage caused by the corona pandemic. But meanwhile, the number of infections in the country is rising rapidly. Recently, the corona measures have been tightened. The state of emergency in the capital Tokyo is expected to be extended. Tokyo has recently hosted the Olympic Games. Due to the corona measures, the sports stadiums were virtually empty.

Due to a slow vaccination program, Japan is often dependent on restrictions to contain the virus. However, these measures appear to be less effective in the longer term. Economic development in the current quarter will depend to a large extent on how shoppers behave, and whether they continue to ignore government warnings, economists say.

Exports grew 2.9 percent quarter on quarter in the second quarter, despite disruptions in the Japanese auto industry in particular due to chip shortages and problems in the global supply chain. According to a definitive figure, the government also announced that industrial production increased by 6.5 percent in June compared to May.

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