TOKYO, 19 May 2026 – Japan’s economy expanded more strongly than expected in the first quarter, supported by exports, household spending and corporate investment, but the recovery now faces a major test from rising energy prices and inflation pressure linked to the conflict in the Middle East.
Real gross domestic product grew 0.5% quarter-on-quarter in the January-to-March period, beating market expectations for 0.4% growth and accelerating from a revised 0.2% expansion in the previous quarter. On an annualised basis, Japan’s economy grew 2.1%, marking a second consecutive quarter of expansion and its strongest quarterly performance since the third quarter of 2024.
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