Japan’s economy grew much faster than expected at the start of the year, supporting the case for further Bank of Japan interest-rate hikes, though the outlook remains highly uncertain due to the Middle East conflict.

Real gross domestic product (GDP) expanded 2.1% on an annualized basis in the first quarter, according to a Cabinet Office report on Tuesday. The reading exceeded economists’ forecast for a 1.7% expansion and marked an acceleration from a downwardly revised growth pace of 0.8% in the previous quarter.

Stronger-than-expected private consumption and trade helped power the acceleration in growth.