- Takeshi Minami, chief economist at Norinchukin Research Institute
Economic growth of Japan, the world's third biggest economy, was revised sharply to the upside in the first quarter, underscoring the Bank of Japan's belief that recovery from last year's recession is gaining steam. The economy expanded an annualised 3.9%, overshooting a preliminary estimate of a 2.4% gain, and beating a median market forecast for 2.7% growth. The upward revision mostly reflects better-than-expected capital spending, which soared 2.7% on quarter, compared with the 0.4% preliminary estimate. Measured on a quarter-on-quarter basis, the Japanese economy grew 1%, higher than the initial estimate of 0.6%, and compared with the 0.4% in the previous three-month period. Also, household spending rose an annualized 1.5%, remaining unchanged, while business inventories added 2.2% to the overall growth, compared with a preliminary figure of 2.0%. Meanwhile, exports surged 9.9%, also in line with the preliminary estimate.
The second consecutive quarter of growth follows last year's contraction caused by the first hike in the sales tax in 17 years. Growth for the fourth quarter was also revised up to 1.2% from 1.1%. The data is encouraging news for the Japanese government and the Bank of Japan, which are hoping that expectations of a steady economic recovery will boost companies and households to increase spending.
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