The growth of the Japanese economy surprisingly accelerated to 2.1% in the first three months of the year, thus marking a second consecutive quarter of growth. The country’s economy managed to surpass the forecasts for a contraction of 0.2% after the imports got a faster decline than in exports.

Compared to the previous quarter, the real GDP grew by 0.5%, taking into account seasonal factors.

The state investment in healthcare and private investment in the housing sector plays a key role in a good outcome. Again, the escalating trade war between the US and China has repercussions on the demand for export goods from Japan.

Imports fell by 4.6%, the biggest decline in a decade alone, while exports were down by 2.4%.

In the first three months, however, capital expenditures declined by 0.3% and the government reported that private consumption, which is a major component of Japanese GDP, shrank 0.1% on the previous quarter.

At the end of April, the Central bank of Japan promised not to raise interest rates before the spring of 2020, thus setting an end date for the “extended period”, during which it will maintain low-interest rates.

The surprise economy at the beginning of the year means that GDP growth will be faster this year than we expected. These figures will certainly allow the government to increase the sales tax in October as planned after a number of politicians earlier opposed this decision, citing uncertain domestic and global economic conditions.

Japanese Prime Minister Shinzo Abe has postponed the increase once after the trade war has affected China’s economic growth, which has sparked concerns from politicians.