Nominal GDP hits record 687.7 trillion yen, up 4.8% annualized in Q2

2026-08-17

Gross domestic product in the April-June quarter rose 4.8% on an annualized, quarter-on-quarter basis in nominal terms, reflecting higher prices, and the annualized amount reached a record 687.7182 trillion yen. While private consumption and capital investment were weak in real terms, nominal GDP was lifted.

Nominal growth continues for nine straight quarters

The Cabinet Office announced the figures on the 17th. Nominal GDP growth has continued, supported not only by higher prices but also by the normalization of the economy from the COVID-19 pandemic. The government aims to generate 370 trillion yen in public and private investment and expand GDP to nearly 1,100 trillion yen in fiscal 2040.

R&D services exports contributed

In the April-June quarter, exports of corporate research and development services drove growth. Exports of goods and services rose 3.9% in nominal terms from the previous quarter, contributing 0.9 percentage point to growth. Research and development services include transactions related to basic research, applied research and new product development, as well as the sale and purchase of patent rights and design rights. A Cabinet Office official said exports during the period may have stood out because pharmaceutical companies transferred patent rights overseas.

Lower crude oil imports also lifted growth

Meanwhile, a decline in crude oil import volumes amid worsening conditions in the Middle East boosted GDP-based growth. Before any closure of the Strait of Hormuz, Japan relied on the Middle East for more than 90% of its crude oil imports. In May, crude oil and raw oil import volumes from the Middle East fell by about 60% from a year earlier, and Japan stepped up alternative procurement from the United States and Asia. The GDP deflator rose 2.6% from a year earlier.

Price pressures remain in focus

Higher crude oil prices driven by the Middle East crisis are expected to feed through in earnest to electricity and gas bills from this autumn. The government plans to provide subsidies for power and gas charges from July to September, but after the program ends, inflation could accelerate again through higher energy prices.

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