Investing.com - The Japanese economy grew at a rate well above forecast in the first quarter but the recovery in private consumption remains weak, prompting speculation that a planned sales tax hike will be shelved.
According to official figures released Wednesday, GDP increased an annualized 1.7% in the first three months of the year, boosted by the leap-year factor. That compared with a median forecast of 0.2 percent. Output contracted 1.7% the previous quarter.
Private consumption, which accounts for 60 percent of GDP, rose 0.5 percent, double the median forecast. But growth was not strong enough to ward off fears of a possible contraction in the current quarter and the need for a further stimulus package.