POLL-Japan’s economy likely rebounded in Q2 as consumers raged

By Kantaro Komiya

TOKYO, August 5 (Reuters)Japan’s economy likely rebounded in April-June from the previous quarter’s contraction on the back of strong consumer spending in face-to-face services no longer hampered by coronavirus restrictions, a Reuters poll showed on Friday.

For the current quarter, however, analysts are concerned about rising risks, including the possibility of a global economic slowdown and a resurgence of COVID-19 cases in Japan.

The world’s third-largest economy likely grew at an annualized rate of 2.5% in April-June, rebounding from a 0.5% contraction in the first quarter, according to median forecasts from 17 economists.

The second quarter expansion was largely driven by a projected A 1.3% rise in private consumption, which accounts for more than half of Japan’s gross domestic product (GDP), according to the survey.

Capital spending likely rose 0.9%, according to the poll, which also suggests external demand has increased 0.1 percentage point to GDP growth.

A recovery in consumption since the lifting of COVID-19 restrictions in March boosted growth from April to June, said Saisuke Sakai, senior economist at Mizuho Research and Technologies, who also pointed to robust business investment carried forward. from last year.

All of this offset the negative effect on Japanese production from the lockdowns in China, Sakai said.

But “Japan’s pace of recovery will be slower in July-September as households may be wary of the (renewed) outbreak of the coronavirus, coupled with other downside risk factors, such as rising prices. and the slowdown in the global economy,” he added.

Separate data will likely show that Japan’s current account balance in June marked its first deficit since January, due to soaring imports. The median estimate is for a shortfall of 703.8 billion yen ($5.29 billion).

Wholesale price were estimated to be 8.4% higher in July than a year earlier, with the pace of increases slowing for a third month, the poll also showed. Wholesale price inflation hit a record 9.9% in April.

The government will release preliminary April-June GDP data at 8:50 a.m. on August 15 (2350 GMT, August 14) and current account data at 8:50 a.m. on August 8 (2350 GMT, August 7).

The Bank of Japan will release wholesale price data at 8:50 a.m. on August 10 (23:50 GMT, August 9).

($1 = 133.1500 yen)

(Reporting by Kantaro Komiya; Editing by Bradley Perrett)

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