The Japanese economy grew at an annualized rate of 21.4 per cent in the July-to-September period, the government said on Monday, marking the first period of growth in four quarters following a historic recession.
The economy bounced back strongly as business activities restarted despite the Covid-19 pandemic following a month-long coronavirus state of emergency in the country.
The reading was better than the median forecast of an 18.9-per-cent expansion by analysts surveyed by the Nikkei Business Daily, and comes after a record annualized 28.8-per-cent contraction in the second quarter.
Private consumption rose 4.7 per cent quarter-on-quarter following an 8.1-per-cent fall in the April-to-June period, the Cabinet Office said in a statement.
However, corporate investment fell 3.4 per cent for the second straight quarter of contraction, the office said.
Exports rebounded 7 per cent in the July-to-September quarter following a 17.4-per-cent contraction in the second quarter.
Imports fell 9.8 per cent in the third quarter after growing 2.2 per cent in the previous period.
The economy was hit hard by the pandemic and a consumption tax increase to 10 per cent on October 1 from 8 per cent.
In April 2014, then-prime minister Shinzo Abe’s government also raised the consumption tax from 5 per cent to 8 per cent in the first hike in 17 years.
Under Abe, who resigned in September due to health issues, the economy had failed to produce solid growth amid stagnant wages and weak consumer spending.
The nation’s average household spending fell 10.2 per cent year-on-year in September for the 12th consecutive month of decline, though the government provided 100,000 yen (956 dollars) in cash to every resident to reinvigorate the pandemic-hit economy.
Japan has so far avoided an explosive outbreak as seen in Europe and the United States with a total of more than 119,000 known infections and about 1,900 Covid-19-related deaths.