Japan avoided financial crisis,as in the first quarter of this year the consumers boosted country’s economy
Due to high consumers’ spendings, Japan’s economy experienced a 0.4pc increase in the first three months of 2016, following a drop of 0.4pc at the end of 2015.
According to data released by the Japanese Cabinet Office, the country’s GDP also rose 1.7pc, while the nominal GDP grew by 2.2pc. Household spendings increased 0.5pc, despite business investment falling 1.4pc.
The aforementioned figures translate into the biggest annual increase since 1997.
Despite unprecedented growth, economists say Japan is not off the hook when it comes to recession risk and that the second quarter of the year will be more relevant.
“Private consumption made only a feeble recovery from last quarter’s slump, while business spending was weak and negative. Accordingly, the scheduled sales tax hike for next year may still be delayed and hopes for further Bank of Japan monetary easing may stay alive,” BNP Parisbas comments.
To boost economy, the country’s prime minister, Shinzo Abe, aims to raise Japan’s workforce by the end of 2020 with more than one million people, including more women, raise minimum wage and part-time remuneration and promote a series of new laws to encourage equal pay.
