The economy grew at a weaker-than-expected annualized rate of 1.4 percent in the April-June quarter as consumption slowed, fueling expectations for an emergency budget and additional monetary easing to underpin growth.
The result, released by the Cabinet Office on Monday, is much weaker than the 5.5 percent rate logged in January-March. Economists expected second-quarter gross domestic product to expand by an average real, or inflation-adjusted, 2.2 percent from the previous quarter in a Kyodo News survey.
Analysts warned of a further slowdown in the second half of the year as domestic demand linked to reconstruction in the March 2011 disaster zone begins to falter as the gloomy outlook for the global economy continues to weigh on exporters already hurt by the strong yen.