Belfast Telegraph

Home News World

Figures show recovery in Japan

Japan's economy grew at an annual rate of 4.1% for January-March amid a gradual recovery from the catastrophic earthquake and tsunami of the previous year.

The Cabinet Office said the preliminary data for the gross domestic product, or the measure of a nation's goods and services, showed a rebound in consumer spending that was lifting the economy.

After the March 11 disaster last year, many Japanese were in mourning and stayed away from stores, theatres and pubs. That hurt an already hobbled economy badly hit by the disaster in north eastern Japan, which disrupted supply chains and ground manufacturing plants to a halt.

But the latest data showed that private consumption grew at an annual rate of 4.4%. Consumer spending makes up more than half of Japan's economy.

"The numbers show a solid Japanese economic recovery," said Satoshi Osanai, economist at Daiwa Institute of Research in Tokyo.

Consumer spending got a huge lift from government subsidies for ecological vehicles that sent buyers to dealerships for hybrids and other fuel-efficient models.

But prospects remained uncertain for this quarter because of fears about the European economy and other factors that could crimp expansion.

Also robust was public investment at 23.6%, reflecting reconstruction spending in housing and other building in the devastated north eastern region.

Japan's economy grew 1.0% in the quarter ended March from the October-December 2011 quarter. That was better than the 0.7% on-quarter growth that was projected by analysts in Japan, and translates to a 4.1% expansion in annual terms.

The latest growth marks a third straight quarter of growth, although still at fragile rates. The economy was virtually flat from October to December but did not shrink. Corporate spending was weak during the January-March period, shrinking 3.9% from the previous quarter, or an annualised rate of 14.8%.

Popular

From Belfast Telegraph