Tokyo (AsiaNews/Agencies) - Japan's economy expanded at a slower pace than expected in the second quarter. Gross domestic product grew 0.6 per cent in the April to June period, at an annualised increase of 2.6 per cent, down from the 4.1 per cent annual rate in the first quarter with exports and public spending contributing to most of the growth, this according to data released today by the Cabinet Office.
This is the third quarter of expansion for the Japanese economy, an important achievement considering the huge problems the government faced when it came into office, such as higher energy costs and a negative impact on industrial production due to the loss of several nuclear power plants.
Prime Minister Shinzo Abe's economic policies, dubbed 'Abenomics,' have led a weaker yen and stronger exports, but the business community is not yet convinced.
Higher consumer prices could still harm recovery if wages are not raised, which is not likely at present.
"The results show that 'Abenomics' has succeeded in boosting consumer sentiment and spending but it has yet to encourage companies to spend more and raise wages," said Takeshi Minami from Norinchukin Research Institute Tokyo.
"As such, it remains unclear if growth could be sustained in the long run."