Japan’s economy grew an annualised real 2.1 percent in the January-March period, marking the second straight quarterly expansion, led by a recovery in exports and private consumption, government data showed Tuesday. This expansion follows a period of volatile growth in recent years, where the economy frequently alternated between minor contractions and slow recoveries due to global supply chain disruptions and shifting domestic demand.
In the first quarter of 2026, gross domestic product adjusted for inflation increased 0.5 percent from the October-December period, the Cabinet Office said in its preliminary report, beating market expectations. GDP is the total value of goods and services produced in a country. Historically, Japan’s GDP growth has hovered at low baseline levels, deeply impacted by long-term structural challenges including a shrinking, aging workforce and persistent deflationary pressures that the Bank of Japan spent years trying to counteract through ultra-loose monetary policy.
Private consumption posts fifth straight quarterly expansion
Economists polled by the Japan Centre for Economic Research had forecast an annualised real expansion of 1.56 percent while expecting growth to slow to 0.45 percent in the April-June quarter, Kyodo News reported.
In the January-March period, private consumption, which accounts for more than half of the economy, grew 0.3 percent, rising for the fifth straight quarter. This steady rise marks a notable shift from previous years, when stagnant wage growth and a weaker yen heavily suppressed domestic consumer spending. Exports rose 1.7 percent from the October-December quarter on a recovery in auto shipments bound for the US market and strong demand for machinery and electrical devices for industrial purposes. Imports edged up 0.5 percent.
Nominal GDP increased 0.8 percent from the October-December period, at an annualised rate of 3.4 percent.
