After witnessing a contraction in the previous quarter, Japan's economy saw a 0.3% rise during the three months ended June, recording a higher-than-expected growth amidst the surge in coronavirus infections and imposition of new restrictions.

Notably, analysts had estimated the country’s quarter-on-quarter growth to be just 0.1%. The contraction in the first quarter was due to a decline in consumption after the government requested citizens to stay at home to prevent the spread of the virus.

According to sources, the cabinet office made an upward revision for Q1, after economic growth plunged by 0.9%, slightly lesser than the estimated 1% decline.

Last year, the country witnessed growth in the two quarters leading up to December, but a resurgence in COVID-19 cases over the winter led the government to declare states of emergency, bringing economic growth to a grinding halt.

It is worth noting that capital city Tokyo, and several regions have been substantially slow at implementing vaccine rollouts as compared to other developed nations and have spent a large part of the year under virus restrictions.

The program has now picked up the pace and approximately one-third of the Japanese population is fully vaccinated. But COVID-19 cases in the country are at record levels with the number of daily cases reaching the 20,000 marks during the past few days.

If reports are to be believed, the sharp rise in infections has delayed possibilities of a fast vaccine-driven recovery, although some analysts believe that growth is still in the offing.

Japan’s output edged higher in the second quarter and will follow along the same lines during the current quarter with the Delta-driven fifth wave clouding any chances of heavy consumer spending. However, efficient vaccine rollouts are likely to be a game-changer and might instigate a strong economic recovery in Japan in the last quarter.

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https://www.moneycontrol.com/news/business/economy/japans-economy-grew-0-3-percent-in-q2-despite-virus-surge-7340561.html