TOKYO (AP) — The Japanese economy grew at an annualized rate of 2.1% in the January-March quarter, the government said Tuesday, showing its resilience despite rising energy prices because of the war in Iran.Japan’s real gross domestic product, or GDP, the sum value of a nation’s goods and services, grew at a seasonally adjusted 0.5% from the previous quarter. It was the second straight quarter of growth. The annualized number shows what the growth, or contraction, would have been if the quarterly rate continued for a year.Increased spending by consumers and businesses helped contribute to the stronger than expected results. Higher government spending also supported the expansion. Private consumption rose 0.3% quarter-on-quarter, or at an annualized rate of 1.1%, according to the preliminary data from the Cabinet Office. Public demand rose 0.3% from the previous quarter.
Japan’s economy contracted in July-September last year, then eked out moderate growth in October-December of 0.2% on-quarter.A big challenge for resource-poor Japan is soaring oil prices. Brent crude, trading at levels of about $70 a barrel before the war, has recently cost nearly $110 a barrel.
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The Strait of Hormuz, a vital transport route for oil exports from the Persian Gulf to Asia, has been effectively blocked due to the war, pushing prices higher. Japan has released some oil reserves and is working on alternate routes.
