Financial News: Japan GDP Growth Revised Down To 1.8%

Japan GDP Growth Revised Down To 1.8%

(RTTNews) - Japan's economy expanded a slower pace than initially estimated in the first quarter largely reflecting the decline in business investment, revised data from the Cabinet Office showed Monday.

Gross domestic product logged an annualized growth of 1.8 percent in the first quarter, which was revised down from the 2.1 percent growth estimated initially.

On a quarterly basis, the economy expanded 0.5 percent in the first quarter, in line with the preliminary estimate.

Business investment was revised down sharply in the first quarter to show a 0.7 percent fall compared to the initial estimate of 0.3 percent increase. Private consumption grew by unrevised 0.3 percent. At the same time, growth in government spending was revised up to 0.3 percent from 0.1 percent.

Domestic demand contributed 0.2 percentage points to growth and net exports provided 0.3 percentage points.

Despite weaker growth and uncertainty over the war in the Middle East, the Bank of Japan is widely expected to raise its policy rate at the upcoming meeting to address inflationary pressures.

The next monetary policy decision is due on June 16. The previous change in the interest rate was a quarter-point hike in December 2025.

Last week, the Organisation for Economic Co-operation and Development said Japan's real GDP growth is set to ease slightly to 0.6 percent this year and 0.8 percent in 2027.

The OECD said domestic demand will be the main driver of growth in Japan despite the headwinds from the rising cost of energy imports. Headline inflation is forecast to move towards the 2 percent target in late 2027.

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