Japanese economic growth fell far short of expectations in the past quarter, new figures showed on Friday, casting doubt on the momentum of the country’s recovery.
Gross domestic product (GDP) in April-June grew 0.4 per cent in real terms from the previous quarter, translating into annualised growth of 1.7 per cent. The consensus forecast was for expansion of 4.1 per cent.
The recovery was widely thought to have slowed following annualised growth of over 6 per cent in the previous two quarters, but the new data revealed a dramatic loss of speed.
Ryo Hino, economist at JP Morgan Chase, called it a “shocking result”, but most observers agreed the recovery remained on track.
The main cause of the disappointing reading was a lack of new corporate spending, the government said. Business investment was flat, having risen 6.7 per cent and then just 1.7 per cent in the previous two quarters respectively.
