The economy of Japan grew at a faster pace than expected in three months throughout June, regaining much of the ground it lost because of the coronavirus pandemic and indicating better resilience as it faced risks surfacing in the world economy.
The GDP (Gross Domestic Product) grew at an annual rate of 3.5% in the nation for the second quarter recorded in the previous periods, as per the Cabinet Office data. Economists in the country expected an expansion of 2.9 compared with an anticipated initial reading of 2.2%.
Kavan Choksi– factors triggering the economic growth
Kavan Choksi, a well-known business and financial expert with in-depth understanding of cryptocurrencies and investment are of the opinion that the critical factor leading to Japan’s economic growth was strong business spending. Companies were confident in the second quarter of the year and this approach drove a shift in the economy. Besides the above, other significant factors responsible for the economic growth and more substantial expansion in Japan included private consumption with net exports.
The economy of Japan has regained its pre-pandemic size
The recent figures by analysts confirm that the economy of the nation regained the size that existed before the advent of the coronavirus pandemic. Today, the Government has a firm foot on the economy than it was just a few months ago. Fortunately for Japan, the waves of economic recovery had picked up from the winter months when the coronavirus was holding sway. It recorded gains in customer outlays where business spending increased 2% after the ministry of finance issued reports of more robust growth recently.
Challenges still exist, but analysts are optimistic
There is anticipation that the pace of economic growth might slow down a little because of the record coronavirus wave and persistent snarls in the supply chain that is restricting consumer spending and production. Households are bearing rising costs, and the Yen that persists in recording new 24-year lows against the US dollar is triggering higher energy and the prices of imported food.
An improvement in capital investment will bring a positive boost to the economy
Economic analysts and business experts state that a boost in capital investment has resulted in the upward revision of the economic growth rates in the nation. However, they are sensing that the rebound in the area of consumption has stalled a little, as inflation is affecting consumers. The recovery from this phase is expected from substantial capital investments. However, hope is on the economy of the USA as if it slows down. Unfortunately, Japan will take the hit too.
According to business and finance expert Kavan Choksi, the blow to the national economy from the recent coronavirus wave is expected to be much lesser than its previous surges in the recent past.
The Japanese Government has managed to keep the economy free from COVID-19-related restrictions with strategic policies and transformation. Though new cases of the coronavirus soared to over 200,000 a day during the summer before its peak, the number of deaths and severe cases remained quite limited compared to the number of infections recorded in the nation.