Japan economy grows 1.1% annualized in Q2, missing forecasts

GDP growth private consumption capital spending Bank of Japan economic slowdown

Japan’s economy expanded by 0.3% in the second quarter of 2026 on a quarterly basis, representing an annualized growth rate of 1.1%. This performance fell short of the 2.0% growth projected by market analysts. Despite the slowdown, the economy has achieved three consecutive quarters of expansion.

Growth was supported by net external demand, which added 0.5 percentage points to the GDP, and increased government spending, which rose by 1.6%. However, these gains were offset by weak domestic demand. Private consumption remained flat, marking its first decline in eight quarters, as households faced higher costs for goods like tobacco and energy due to Middle East conflicts.

Capital spending also acted as a drag, falling 1.2% during the quarter. Analysts suggest that while exports of semiconductor-related equipment and hybrid vehicles remain resilient, rising import costs and supply chain disruptions could continue to pressure consumer spending in the coming months.

Entities

Bank of Japan · Cabinet Office · Dai-ichi Life Research Institute · Japan · Japan Centre for Economic Research · Middle East · Reuters · Toyota Motor Corp.

Claims

What the coverage asserts, and how many sources carry each claim.

[DISPUTED] Capital spending fell by 1.2% in the second quarter. www.businesstimes.com.sg · wdez.com · kelo.com · wtvbam.com · jack1065.com · +8 more
[● 23 SOURCES] The quarterly GDP rise was 0.3%, missing the median market estimate of 0.5%. www.businesstimes.com.sg · wdez.com · kelo.com · wtvbam.com · www.europesays.com · +13 more
[● 23 SOURCES] Private consumption remained flat during the second quarter. www.businesstimes.com.sg · wdez.com · kelo.com · wtvbam.com · jack1065.com · +15 more
[● 14 SOURCES] Japan has recorded three consecutive quarters of economic growth. www.businesstimes.com.sg · wdez.com · kelo.com · wtvbam.com · jack1065.com · +8 more
[● 30 SOURCES] Japan's annualized GDP grew by 1.1% in the second quarter of 2026. www.businesstimes.com.sg · wdez.com · kelo.com · wtvbam.com · www.europesays.com · +19 more
[● 9 SOURCES] Economists forecast annualized GDP growth could slow to 0.05% in the July-September quarter. www.businesstimes.com.sg · wdez.com · kelo.com · wtvbam.com · jack1065.com · +4 more
[● 23 SOURCES] The 1.1% annualized growth was below the median market estimate of 2.0%. www.businesstimes.com.sg · wdez.com · kelo.com · wtvbam.com · jack1065.com · +15 more
[● 9 SOURCES] Net external demand contributed 0.5 percentage points to growth. www.businesstimes.com.sg · wdez.com · kelo.com · wtvbam.com · jack1065.com · +4 more
[● 3 SOURCES] Net external demand added 0.5 percentage points to growth. www.businesstimes.com.sg · wdez.com · jack1065.com
[● 6 SOURCES] The annualized 1.1% growth was below the median market estimate of 2.0%. www.businesstimes.com.sg · www.japantimes.co.jp · wdez.com · jack1065.com · www.cnbce.com
[DISPUTED] Japan’s annualized GDP growth was 1.1% in the second quarter of 2026. www.businesstimes.com.sg · www.japantimes.co.jp · www.europesays.com · japannews24.com · www.sbctv.gr · +11 more
[● 12 SOURCES] Capital spending fell 1.2% in the second quarter. www.businesstimes.com.sg · www.japantimes.co.jp · japannews24.com · news.tuoitre.vn · srnnews.com · +6 more