Economics
Japan's Unexpected Growth Spurt Comes With Reasons for Caution
- Exports fall by most since 2015 as external demand weakens
- Strong GDP figure supports tax hike but outlook is uncertain
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Japan’s unexpected growth spurt in the first quarter masked weakness in the economy just as policy makers prepare to hike the sales tax in October.
Gross domestic product expanded an annualized 2.1%, but the biggest driver was imports falling even faster than exports, which meant that net exports technically fueled growth in the economy. Declining imports is a sign of weakness in demand, so the GDP figure is somewhat misleading.