Japan set for third quarter of growth on solid domestic demand: Reuters poll

By Satoshi Sugiyama

TOKYO, Aug 7 (Reuters) – Japan’s economy is expected to have expanded for a third straight quarter in April-June, as solid domestic demand and a decline in ​imports offset headwinds from the Middle East conflict, a ‌Reuters poll showed on Friday.

Here are a few details:

• Gross domestic product (GDP) in real terms likely expanded an annualised 2.0% in the second quarter, according to the median forecast of 15 economists, after a 1.8% expansion in ‌January-March.

• ​The April-June growth rate was estimated at ⁠0.5% against the previous three ⁠months.

• Economic growth will be among factors considered by the Bank of Japan in deciding whether to raise interest rates as soon as September.

• Analysts said private consumption and capital ​investment remained firm, helped by government measures to ease cost-of-living pressures and progress in securing alternative energy supplies, even as ⁠the U.S.-Israeli war with Iran pushed ⁠up raw material prices and disrupted supply chains.

• Junpei ​Fujita, a senior analyst at Mitsubishi UFJ Research and Consulting, said ​the contribution from external demand is expected to have ‌been significantly positive, reflecting a temporary upward swing in service exports and a decline in imports, mainly mineral fuels.

• “Overall, the figures are likely to confirm that the economy continued to recover gradually. ⁠However, the prolonged confrontation between the United States and Iran remains a source of concern going forward,” Fujita said.

• Private consumption, which accounts for ⁠more than half ‌of Japan’s GDP, is expected to have grown ⁠0.5%. Capital expenditure was seen growing 0.4%, ​bouncing back ‌from the previous quarter’s 0.7% contraction.

• Net external ​demand, or ⁠exports minus imports, probably added 0.3 percentage points to GDP growth, after its contribution increased 0.3 percentage points in the previous quarter.

• The government will release preliminary April-June GDP data on August 17 at 8:50 a.m. (2350 GMT on August 16).

(Reporting by Satoshi Sugiyama; Editing ​by Jacqueline Wong)