Japan grows above expectations

Japan’s economy grew faster than expected in the first quarter, helped by a recovery in tourism following the lifting of pandemic restrictions, official data showed on Wednesday. Japan’s nominal GDP hit a record 570.1 trillion yen, Economy Minister Shigeyuki Goto said, surpassing its pre-pandemic peak for the first time. GDP rose 1.6 percent in the first quarter of 2023 from the same period a year earlier and 0.4 percent from the previous quarter. Economists had expected GDP to rise 0.7 percent annually and 0.1 percent from the previous quarter. Ahead of the release of the GDP data, Ryutaro Kono, chief economist at BNP Paribas, said spending by tourists visiting Japan in the three months to March “recovered rapidly, and domestic spending also seems to have recovered rapidly.” The world’s third-largest economy reopened its borders to foreign tourists in October after two and a half years of tough COVID restrictions that had devastated the economy. Economists said a surge in private consumption, centered on the service sector including restaurants and hotels, helped offset the negative impact from foreign trade. The data showed exports of goods and services contracted 4.2 percent against a backdrop of a slowing global economy and as the yen rebounded from lows recorded last year.