Japan’s July retail sales beat expectations as its consumer sector continued recovering, although a coronavirus resurgence has cast doubts over the country’s outlook for future growth, Reuters reports.

A surge in Delta variant cases this month forced the government to widen state of emergency restrictions, which are now threatening to hurt consumer spending and derail a fragile economic recovery.

Retail sales rose 2.4 percent in July year-on-year, government data showed on Monday, slightly more than economists’ median forecast of 2.1 percent growth in a Reuters poll. This follows a 0.1 percent increase in June.

The trade ministry data found strong demand for a variety of items such as cars, clothing, general merchandise and food.

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