Japan GDP Q2 2022


Japan: GDP growth accelerates in the second quarter

August 15, 2022

According to a preliminary estimate, GDP growth accelerated to 2.2% in seasonally-adjusted annualized rate terms (SAAR) in the second quarter, from 0.1% in the first quarter.

The upturn reflected improvements in private consumption, public spending, fixed investment and exports. Private consumption increased 4.6% in the second quarter, which was above the first quarter's 1.2% expansion. Public consumption accelerated to a 2.2% expansion in Q2 (Q1: +1.7% SAAR). Meanwhile, fixed investment bounced back, growing 3.4% in Q2, from the 4.2% contraction in the prior quarter.

Exports of goods and services growth improved to 3.7% in seasonally-adjusted annualized terms in the second quarter, which marked the best reading since Q2 2021 (Q1: +3.6% SAAR). Conversely, imports of goods and services growth waned to 2.7% in Q2 (Q1: +14.8% SAAR).

On an annual basis, economic growth accelerated to 1.1% in Q2, compared to the previous quarter's 0.7% increase.

Naohiko Baba, chief Japan economist at Goldman Sachs said:

“We forecast real GDP in Q3 will remain on a moderate growth path led by domestic demand as the government is not implementing any particular measures to restrict economic activity despite a resurgence in COVID-19 infections. That said, we note that rising inflation driven by cost-push factors, such as higher commodity prices and the weak yen, could depress consumer sentiment, while the risk of a recession has risen in Europe and the US in particular.”

ING’s Min Joo Kang sees GDP slowing in Q3:

“2Q GDP was slightly below the market consensus, but 1Q GDP was revised up, thus we keep the annual GDP growth unchanged. However, we expect GDP growth to slow this quarter due to high inflation and the re-emergence of new Covid cases. The Bank of Japan will remain accommodative as downside risks to a recovery increase while there are no clear signs of demand-driven inflation.”

FocusEconomics panelists see the economy expanding 1.6% in 2022, which is down 0.1 percentage points from last month’s forecast, and 1.6% in 2023.


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Japan GDP Chart

Japan GDP Q2  2022

Note: Quarter-on-quarter seasonally adjusted annualized changes and annual variation of GDP in %.
Source: Cabinet Office (CO) and FocusEconomics Consensus Forecast.

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