The Japanese government on Thursday raised its assessment of the economy for the first time in 15 months, citing a modest recovery in private consumption, Kyodo News reported on August 29.
In its monthly report for August, the cabinet described the economy as “recovering at a moderate pace, although it appears to be partially stagnant.”
The government used the same phrase for the sixth consecutive month through July: the world’s fourth-largest economy is “recovering at a moderate pace, although there appears to have been a pause recently.”
The upward revision comes after Japan’s real gross domestic product rose 3.1 percent in the April-June period, the first increase in two quarters.
Growth was helped by a recovery in private consumption, a key driver of Japan’s economic growth, as the resumption of vehicle deliveries at Toyota Motor Group made it easier for some consumers to buy cars. Deliveries were halted following a scandal involving falsification of safety data.
Private consumption, which accounts for more than half of the economy, “has recently shown a move toward growth, while weakness persists in some sectors,” the report said. The upward revision of private consumption was also the first in 15 months.
Extreme summer heat boosted sales of air conditioners, a government official said, while consumer spending was also supported by strong sales of televisions ahead of the Paris Olympics, which run until mid-August.
Meanwhile, outbound travel volumes remained stable due to the weaker yen, the official said.
For the first time in 26 months, housing construction went from “weak” to “virtually zero,” meaning it is unlikely to slow down any time soon.
The government continued to assess other key components, including public and private sector investments and exports.
In the latest report, the government reaffirmed its assessment of the global economy, saying it was recovering despite possible signs of slowdown in some areas.
Source: Rossa Primavera
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