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75755
Mon, 08/17/2009 - 23:40
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Japan`s economy expands in April-June for 1st time in 5 quarters
TOKYO, Aug. 17 Kyodo -
Japan's economy expanded in the three months through June, marking the first
growth in five quarters, as a rebound in exports and the government's economic
stimulus package helped the country pick up from the recession, government data
showed Monday.
The Japanese economy, as measured by gross domestic product, grew an annualized
real 3.7 percent in the period from April to June, after a revised 11.7 percent
contraction in the January to March quarter and a revised record slump of 13.1
percent in the October to December period.
However, economists are skeptical about the recovery's stability and strength,
saying deteriorating employment and income conditions could throw cold water on
consumer spending, which has just started to improve due to the stimulus
package.
The Cabinet Office said the GDP rise was due largely to a rebound in exports,
especially to other Asian economies, after a sharp downturn amid the global
financial crisis. A huge package of government stimulus measures, including tax
breaks, subsidies for fuel-efficient cars and an ''eco-point'' system that
rewards purchases of energy-efficient consumer appliances, also helped boost
consumer spending on related products.
On a quarter-to-quarter basis, Japan's GDP posted a price-adjusted 0.9 percent
rise from the January to March period. Economists polled by Kyodo News had
predicted a 3.6 percent annualized increase and 0.9 percent quarterly gain.
''Although severe situations are likely to continue, we expect the economy to
pick up,'' economic and fiscal policy minister Yoshimasa Hayashi told reporters
after the government released the GDP data.
He said the effects of the stimulus measures were seen in private consumption
and public investment. ''We hope parts contributing to a self-sustained
recovery will increase gradually (from now on),'' he added.
Yasunari Ueno, chief market economist at Mizuho Securities Co., said, ''The GDP
report confirmed that the economy has hit bottom, but it's too early to be
optimistic.''
He said consumers boosted spending in the reporting quarter on the back of the
stimulus measures although their incomes were falling and that the
sustainability of such consumption growth is highly doubtful. ''Moreover, I
think downside risks are overwhelmingly large,'' he said.
Recent government data showed that average wages at Japanese companies fell by
a record 7.1 percent in June from a year earlier and the nation's unemployment
rate stood at 5.4 percent in June, just shy of the postwar high of 5.5 percent.
In the reporting quarter, overseas demand boosted GDP 1.6 percentage points,
and domestic demand, including such components as consumer spending and capital
investment, had a downward impact of 0.7 point on GDP.
Exports turned positive for the first time in five quarters, rising 6.3 percent
and marking the fastest pace of growth since the April to June quarter of 2002.
Imports continued to fall, logging a 5.1 percent decline.
On the domestic front, private consumption -- which makes up about 55 percent
of Japanese GDP -- rose 0.8 percent, the first expansion in three quarters, on
improved sales of cars and consumer appliances such as refrigerators and
flat-panel televisions.
Public investment rose 8.1 percent, the sharpest gain since the October to
December period of 1998.
But corporate capital investment and housing investment continued to fall.
Corporate capital investment fell 4.3 percent for the fifth straight quarter of
decline, while housing investment deteriorated further, falling 9.5 percent
after slipping 5.7 percent three months earlier, as housing starts for
condominiums dropped sharply.
The GDP deflator, a broad measure of price trends, grew 0.5 percent from a year
earlier.
Despite the GDP growth in real terms, nominal GDP fell an annualized 0.7
percent in the reporting period, which corresponds to a 0.2 percent contraction
from the previous quarter.
Nominal GDP is believed to show an economic picture closer to what people feel
in daily life than the price-adjusted real GDP.
==Kyodo
Japan's economy expanded in the three months through June, marking the first
growth in five quarters, as a rebound in exports and the government's economic
stimulus package helped the country pick up from the recession, government data
showed Monday.
The Japanese economy, as measured by gross domestic product, grew an annualized
real 3.7 percent in the period from April to June, after a revised 11.7 percent
contraction in the January to March quarter and a revised record slump of 13.1
percent in the October to December period.
However, economists are skeptical about the recovery's stability and strength,
saying deteriorating employment and income conditions could throw cold water on
consumer spending, which has just started to improve due to the stimulus
package.
The Cabinet Office said the GDP rise was due largely to a rebound in exports,
especially to other Asian economies, after a sharp downturn amid the global
financial crisis. A huge package of government stimulus measures, including tax
breaks, subsidies for fuel-efficient cars and an ''eco-point'' system that
rewards purchases of energy-efficient consumer appliances, also helped boost
consumer spending on related products.
On a quarter-to-quarter basis, Japan's GDP posted a price-adjusted 0.9 percent
rise from the January to March period. Economists polled by Kyodo News had
predicted a 3.6 percent annualized increase and 0.9 percent quarterly gain.
''Although severe situations are likely to continue, we expect the economy to
pick up,'' economic and fiscal policy minister Yoshimasa Hayashi told reporters
after the government released the GDP data.
He said the effects of the stimulus measures were seen in private consumption
and public investment. ''We hope parts contributing to a self-sustained
recovery will increase gradually (from now on),'' he added.
Yasunari Ueno, chief market economist at Mizuho Securities Co., said, ''The GDP
report confirmed that the economy has hit bottom, but it's too early to be
optimistic.''
He said consumers boosted spending in the reporting quarter on the back of the
stimulus measures although their incomes were falling and that the
sustainability of such consumption growth is highly doubtful. ''Moreover, I
think downside risks are overwhelmingly large,'' he said.
Recent government data showed that average wages at Japanese companies fell by
a record 7.1 percent in June from a year earlier and the nation's unemployment
rate stood at 5.4 percent in June, just shy of the postwar high of 5.5 percent.
In the reporting quarter, overseas demand boosted GDP 1.6 percentage points,
and domestic demand, including such components as consumer spending and capital
investment, had a downward impact of 0.7 point on GDP.
Exports turned positive for the first time in five quarters, rising 6.3 percent
and marking the fastest pace of growth since the April to June quarter of 2002.
Imports continued to fall, logging a 5.1 percent decline.
On the domestic front, private consumption -- which makes up about 55 percent
of Japanese GDP -- rose 0.8 percent, the first expansion in three quarters, on
improved sales of cars and consumer appliances such as refrigerators and
flat-panel televisions.
Public investment rose 8.1 percent, the sharpest gain since the October to
December period of 1998.
But corporate capital investment and housing investment continued to fall.
Corporate capital investment fell 4.3 percent for the fifth straight quarter of
decline, while housing investment deteriorated further, falling 9.5 percent
after slipping 5.7 percent three months earlier, as housing starts for
condominiums dropped sharply.
The GDP deflator, a broad measure of price trends, grew 0.5 percent from a year
earlier.
Despite the GDP growth in real terms, nominal GDP fell an annualized 0.7
percent in the reporting period, which corresponds to a 0.2 percent contraction
from the previous quarter.
Nominal GDP is believed to show an economic picture closer to what people feel
in daily life than the price-adjusted real GDP.
==Kyodo
