TOKYO, Aug 7 — Japan's economy is projected to have expanded for a third straight quarter in April-June 2026, supported by solid domestic demand and a decline in imports, offsetting challenges from the Middle East conflict, according to a Reuters poll reported by CNA Latest News.

Gross domestic product (GDP) in real terms is likely to have grown at an annualised rate of 2.0% in the second quarter, following a 1.8% expansion in the first quarter. The quarter-on-quarter growth rate for April-June was estimated at 0.5%.

Private consumption, which accounts for over half of Japan's GDP, is expected to have increased by 0.5%. Analysts attribute this resilience to government measures aimed at easing cost-of-living pressures and progress in securing alternative energy supplies. Capital investment also remained firm.

Junpei Fujita, a senior analyst at Mitsubishi UFJ Research and Consulting, noted that external demand contributed significantly to growth, reflecting a temporary rise in service exports and a decline in imports, mainly mineral fuels. Net external demand likely added 0.3 percentage points to GDP growth, consistent with the previous quarter.

However, Fujita cautioned that the ongoing confrontation between the United States and Iran remains a concern for the economic outlook.

Economic growth figures will be among the factors considered by the Bank of Japan when deciding on potential interest rate adjustments as early as September.

Sources