Japan's economy rebounded in January-March after a slump in the previous two quarters, partly supported by a recovery in domestic demand in the oil product and automotive sectors.
Seasonally adjusted gross domestic product (GDP) grew at an annualised rate of 1.6pc in January-March against the previous quarter, according to government data released on 17 May. The economy recovered from its two-quarter slump, where the annualised GDP rate fell by 0.1pc in October-December 2022 and by 1pc in July-September 2022.
Increased demand in both the private and public sectors contributed to GDP growth in January-March. Final consumer spending, which accounts for more than 50pc of GDP, grew at an annualised rate of 2.4pc from 0.8pc in the previous quarter. But exports of goods and services fell sharply by 16pc in the same period of comparison.
The Japanese government has paid subsidies to mitigate the impact from swelling electricity and city gas retail prices since January, on top of those for refined oil products such as gasoline, gasoil, kerosine, heavy fuel oil and jet fuel. This financial support may have partly and indirectly supported private consumption, especially as the government has not imposed any Covid-19 pandemic restrictions.
Japan's jet fuel consumption averaged 70,288 b/d in January-March, up by 6pc from the previous quarter, according to the Petroleum Association of Japan. This suggests that the country's travelling demand and associated spending have increased.
Japan's automotive sector has also seen a gradual recovery in car production and demand, following the easing of auto part shortages. Car production by the country's eight major automobile companies rose by 22pc on the year to 818,000 units in March, excluding commercial vehicles.
