Japan economy dodges recession
Japanese stocks are rising after data showed the country’s economy dodged a recession and grew by 1.7% in the first three months of the year.
The better-than-expected growth rate came after higher government spending helped offset weakness in business investment and exports. Capital expenditure fell by 1.4% during the quarter, showing that businesses remain reluctant to spend.
However, analysts are concerned about the outlook for consumer spending, which accounts for about 60% of GDP. That may take a hit if Prime Minister Shinzo Abe moves to increase the country’s sales tax to 10% from the current 8%.
Japan’s Nikkei newspaper reported this week that Mr Abe plans to postpone the move and will announce his decision after the G7 meeting later this month.
Source: BBCB
