TOKYO, Aug. 17 (Xinhua) -- Japan's economy expanded at an annualized real 1.1 percent in the second quarter of 2026, falling short of market expectations, government data showed Monday.
Quarter-on-quarter, inflation-adjusted GDP rose 0.3 percent in the April-June period, the first full quarter to reflect the impact of the Middle East conflict, which has driven up energy prices for businesses and households, the Cabinet Office said in its preliminary report.
Private consumption, which accounts for more than half of the economy, edged down 0.02 percent from the previous quarter, marking the first decline in eight quarters. Strong sales of automobiles and air conditioners were offset by lower electricity spending. Expenditures on school meals and high school tuition also fell, following the expansion of a government subsidy program in April, a government official said.
Meanwhile, business investment in the reporting period dropped 1.2 percent from the January-March quarter. Exports rose 0.5 percent, and imports declined 1.5 percent, as crude oil shipments were disrupted by the effective closure of the Strait of Hormuz amid the Middle East tensions.
Looking ahead, analysts warned that rising import costs and intensifying upstream price pressures could eventually be passed on to consumers, further weighing on spending later this year. ■
