TOKYO—Japan’s economy grew slightly in the second quarter of 2021 thanks to increasing global demand and better-than-expected private spending, but a resurgence of Covid-19 infections may limit further recovery.
The world’s third-largest economy has struggled this year to recover from last year’s Covid-19 downturn, while other advanced nations, including the U.S., have recorded solid rebounds. The U.S. economy has already recovered its pre-pandemic size.
Tokyo and other cities are in a state of emergency until at least the end of August as a wave of Covid-19 Delta-variant infections sweeps the country.
In the April-June quarter, the Japanese economy expanded 0.3%, or an annualized 1.3%, after contracting in the previous quarter. Economists described the growth as sluggish. Gross domestic product, a measure of the economy’s total output, remains below its pre-pandemic level.
Economy minister Yasutoshi Nishimura said that while the government wants to lift consumer spending, the pandemic limits its ability to do so. “Preventing the spread of infections is our top priority for now,” he said.