Japan’s 2Q24 GDP surprised with the economy expanding more than expected as private consumption and business spending, as well as residential investment and public investments supported growth, offsetting the drags from net exports and net private inventories, UOB Group economist Alvin Liew notes.

Expectations for growth rebound to extend into 3Q

“We expect the latest growth rebound to extend into 3Q supported by an extension of the consumption rebound, aided by influx of tourists and accelerated tech investments. But downside risk factors will continue to loom. While the sequential rebound for 2Q GDP was above expectations, the 1H GDP still contracted by -0.86% y/y. As a result we lower our 2024 GDP growth forecast to 0.2% (2023: 1.9%) before picking up to 1.7% for 2025.”