Preliminary gross domestic data has reported an unexpected growth in Japan’s economy in a time span of three months to March. The product data recorded an economy growing at an annualized 2.1% in this period. Reports suggest that the beat analyst expected a 0.2% contraction as imports fell faster. This was also the anticipated reason- the expansion in the official GDP was anticipated because imports fell faster than exports.
Imports dropped by 4.6% which was recorded as the biggest fall in a decade, whereas exports dropped by more than 2.4%. Owing to the situation of uncertain domestic and global economic conditions, some policymakers have issued a delay to the sales tax increase from 8% to 10%.
Senior Japan economist at Capital Economics Marcel Thieliant said in a statement, “The surprising resilience of the economy at the start of the year means that GDP growth will be stronger this year than we had anticipated.” He also reported that the better-than-expected growth figures will bring out the sales tax hike which was scheduled for October 1. In another statement Economy Minister Toshimitsu Motegi also indicated plans for higher sales tax.
“There’s no change to our view that the fundamentals supporting domestic demand remain solid,” Mr. Motegi reported in a statement.