Japan`s economy grew by 0.9% in the April-June quarter from the previous quarter on the back of improved exports and an increase in private spending

After Germany and France, it is now the turn of Japan to pull out of the worst recession in several decades. Data released by the Government today showed that the world’s second-largest economy registered its first quarterly growth since January-March 2008.

Japan’s economy grew by 0.9% in the April-June quarter from the previous quarter on the back of improved exports and an increase in private spending. That was slightly short of a median forecast of a 1% growth.

Japan’s economy grew 3.7% on an annualized basis in the quarter ended June following a revised annualized contraction of 11.7% in the previous quarter. This was the fastest annualised expansion in GDP since January-March 2008.

External demand contributed 1.6% to April-June GDP growth in Japan, as exports turned up. Private spending rose 0.8%, boosted by Japanese government stimulus steps. Business spending dropped 4.3%, down for the fifth consecutive quarter as companies delayed expenditures on new plants and equipment.

Japan’s economy expanded for the first time in five quarters, following a revised 3.1% contraction in the January-March period and a 3.5% decrease in the final quarter of 2008 – the biggest drop on record.

Japan joined France and Germany as the third G7 nation to come out of recession caused by the global credit crisis. Japan’s second quarter growth compared with a 0.3% contraction in the United States in the same quarter. The euro zone economy shrank 0.1% after a 2.5% fall in the first three months.

But, a few economists warned of a bumpy road to recovery for Japan, saying that the rebound is based on short-term stimulus measures announced by governments and central banks around the world. Exports may slow as stimulus measures taper off.

A deteriorating jobs market is also likely to undermine Japanese consumer spending. This could delay a recovery in capital expenditure.

source: Indiainfoline

Tags: japan recession, recession

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