TOKYO: Japan's economy grew at a better-than-expected annual pace of 5.6% during the first three months of the year, chalking up eight straight quarters of expansion in the best showing in a decade for the long struggling country.
Strong exports combined with surprisingly solid numbers in consumer spending to show Japan's gross domestic product grew 1.4% during the quarter ending March 31 from the previous quarter.
The data confirm the emerging view among analysts that the world's second largest economy appears to be on a recovery track after more than a decade of slowdown when sporadic periods of growth alternated with downturns.
“All we can say is that the numbers are fantastic,'' said Tatsuya Torikoshi, senior economist at Daiwa Institute of Research here.
“If we look at just the numbers, Japan is leading global growth,'' Torikoshi added.
The eight-quarter stretch of growth was the best since Japan racked up nine straight quarters of expansion from the first quarter 1995 through the first quarter 1997.
Yoshihiko Senoo of the Cabinet Office said purchases of clothing and life insurance helped boost consumer spending during the January–March period while exports continued to boom especially in electronics parts and motor vehicles.
Exports surged 3.9%, while private consumption grew 1%, the Cabinet Office said. Capital investment edged up 2.4% as plants and stores went up, it said.
But public investment dipped 3.4% as the government tackled continuing reforms to achieve growth without depending on old-style public works projects.
Yesterday's report underlines the recently emerging signs of better times here, including better corporate earnings reports as companies carry out reforms to trim costs.
Japan's rebound has received a perk from the robust growth in the rest of Asia as well as the United States.
For the fiscal year ended March 31, Japan's economy grew 3.2%, an improvement from the 1.1% growth eked out the previous fiscal year.
But the latest good news is that the growth is being supported not only by exports riding on the back of global demand for electronic goods but also by Japanese beginning to spend more.
“Centred on domestic demand, the recovery is continuing fairly steadily,'' Economy Minister Heizo Takenaka told reporters. – AP
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