Kea Tu Macro: Japan's Q2 GDP growth may stagnate

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ME News, on May 20 (UTC+8), Capital Economics economist stated that although Japan’s economy had built solid growth momentum before the Iran war, it is expected that GDP growth will stall in both this quarter and next quarter. The economist, Marcel Tillion, noted that first-quarter data showed that household spending and business investment both increased month-on-month, and that a sharp rise in exports exceeded the smaller increase in imports, providing support for economic growth. However, despite market chatter that fiscal policy under Prime Minister Sanae Takaichi will become more accommodative, government consumption slowed month-on-month, highlighting that the supplementary budget announced in November last year has not had a substantial impact on government spending. Meanwhile, consumer confidence has fallen sharply, and fuel price cap measures can only temporarily curb inflation. Tillion added that even if the Japanese government drafts a new supplementary budget to fund gasoline subsidies, it can at most stabilize consumer spending. (Source: Jin10)
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