On May 14, the Cabinet Office of Japan released preliminary data showing the country's real gross domestic product (GDP) grew an annualized 2.1% in the January-March quarter, compared to the previous three months.
This figure exceeded economists' forecast of 1.5% growth, indicating that the Japanese economy is recovering positively despite challenges from inflation and weakening global demand.
In the fourth quarter of 2025, Japan's GDP also grew 0.5% quarter-on-quarter, equivalent to an annualized rate of 2.0%.
Consumer spending, which accounts for about 50% of GDP, rose 0.6% in Q1 2026, mainly supported by demand for services and tourism. Business investment increased 0.3%, while exports rose 1.2%.
However, imports also increased 2.5%, reflecting strong domestic demand for energy and raw materials.
Japan is the world's third-largest economy. The Q1 2026 data shows the economy is overcoming the impact of tight monetary policy and persistent inflation.
