Loading
Search
▼ Japan’s 10-Day Holiday Period Had Role In Unexpected GDP Rise
- Category:Other
TOKYO — Japan’s preliminary gross domestic product in the April-June period showed growth higher than expected, supported by an increase in private consumption, but sluggish exports weighed on the growth.
The key challenge for Japan will be whether it can withstand headwinds of a planned consumption tax rate hike in October and intensifying trade friction between the United States and China.
The real-term economic growth rate in April-June increased 1.8 percent at an annualized rate, much higher than private research institutes’ projections of less than 1 percent. Pillars of domestic demand such as private consumption, which accounts for more than half of GDP, and capital investment were stronger than expected.
On a quarterly basis, real GDP rose 0.4 percent. Private consumption contributed 0.3 percent to changes in GDP. The unprecedented 10-day vacation period around the change of era from Heisei to Reiwa in May provided a tailwind for the economic growth.
According to a survey by the Internal Affairs and Communications Ministry, consumption expenditure per household (two or more persons) rose 4 percent in May in real terms, compared with the same month last year. It was the highest growth in four years, because of an increase in spending devoted to accommodations and airfares.
The number of domestic and overseas trips handled by the major travel agency JTB Corp. between April 25 and May 5, including the 10-day holiday period, increased by about 40 percent from the same period last year.
“Asian countries and Hawaii have been popular foreign destinations. On the domestic side, long-distance travel to destinations such as Okinawa and Hokkaido grew this year more than usual,” an official from JTB said.
The key challenge for Japan will be whether it can withstand headwinds of a planned consumption tax rate hike in October and intensifying trade friction between the United States and China.
The real-term economic growth rate in April-June increased 1.8 percent at an annualized rate, much higher than private research institutes’ projections of less than 1 percent. Pillars of domestic demand such as private consumption, which accounts for more than half of GDP, and capital investment were stronger than expected.
On a quarterly basis, real GDP rose 0.4 percent. Private consumption contributed 0.3 percent to changes in GDP. The unprecedented 10-day vacation period around the change of era from Heisei to Reiwa in May provided a tailwind for the economic growth.
According to a survey by the Internal Affairs and Communications Ministry, consumption expenditure per household (two or more persons) rose 4 percent in May in real terms, compared with the same month last year. It was the highest growth in four years, because of an increase in spending devoted to accommodations and airfares.
The number of domestic and overseas trips handled by the major travel agency JTB Corp. between April 25 and May 5, including the 10-day holiday period, increased by about 40 percent from the same period last year.
“Asian countries and Hawaii have been popular foreign destinations. On the domestic side, long-distance travel to destinations such as Okinawa and Hokkaido grew this year more than usual,” an official from JTB said.
- August 14, 2019
- Comment (0)
- Trackback(0)