Official data of the best market research companies showed on Monday that Japan’s economy grew in the three months to June after Covid-19 restrictions were lifted.

Strong consumption and capital investment led to 0.5 percent growth in the third largest economy, but it was below market expectations.

The government removed virus restrictions primarily targeting business opening hours in March, despite never issuing strict stay-at-home directions during the pandemic.

While inbound tourism continues to be limited to group tours, the economy is facing headwinds, from the energy price crisis to fears of a global recession.

According to the Cabinet Office, private consumption grew by 1.1 percent from April to June, compared with 0.3 percent in January-March.

Compared to the previous quarter, capital spending increased by 1.4 percent.

Consumption of services rebounded relatively strongly after the government lifted a quasi-state of emergency in late March,” Bank of New York Mellon In a note released before GDP data, NSE -0.21 % said.

According to Mitsubishi UFJ Research and Consulting, private consumption steadily increased as the Omicron variant subsided, especially in-person services, and lifted the economy as a whole.

GDP figures are normally revised in later months based on preliminary data.

An economy that shrank slightly in the first quarter of 2022 was reported by the Cabinet Office in May, but it was revised to zero percent on Monday. Therefore, no change was observed following a modest rebound in the final quarter of 2021.

Although Japan’s consumer prices are not rising as quickly as many other major economies, they are still rising.

As a result of Covid-19 lockdowns in China and sky-high energy prices due to the conflict in Ukraine, disruptions in the supply chain have also caused growth challenges.

As a result of the unexpected resurgence of Covid-19 infections at the beginning of this year and now, we now think the economy’s recovery is less impressive than we had expected at the end of last year,” Masamichi Adachi and Go Kurihara of UBS said in a statement.

Currently, Japan is experiencing a record-breaking wave of Covid-19 infections. Overall, there have been 35,000 deaths from the disease in the country, a very low number compared to many other countries.