Japan's economy grows at an annualized 2.1% rate in the first quarter, beating expectations
Japan's economy experienced an annualized growth of 2.1% in the first quarter of 2026, exceeding expectations. Despite this growth, the Bank of Japan has revised its fiscal year forecast down to 0.5% due to rising crude oil prices and potential stagflation. Analysts warn that the ongoing Middle East crisis may further impact corporate profits and household incomes.
- ▪Japan's GDP grew at an annualized rate of 2.1% in the first quarter of 2026.
- ▪The Bank of Japan has cut its growth forecast for the fiscal year 2026 to 0.5%.
- ▪Inflation in Japan accelerated in March for the first time in five months.
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Japan's economy grew at an annualized 2.1% in the first quarter of 2026, surpassing analysts' expectations, government data released Tuesday showed. GDP rose by 2.1% compared with Reuters-polled analysts' average estimate of 1.7%, and against the 1.3% in the previous quarter. On a quarter-on-quarter basis, the economy expanded 0.5%, compared with estimates of 0.4%, and improving from the 0.3% growth at the end of 2025.These figures do not capture the full impact of the Iran war, which started at the end of February.
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