Business

Tuesday August 18, 2009

Japan’s Q2 GDP up 0.9%


Rebound in exports and stimulus help snap 4-quarter contraction

TOKYO: Japan’s economy grew 0.9% in April-June thanks to a rebound in exports and government stimulus, snapping a four-quarter contraction, the country’s longest recession in modern history.

The 0.9% growth in real gross domestic product (GDP) in the April-June quarter was the biggest rise since a 1.0% increase in January-March 2008.

Private consumption turned up for the first time in three quarters, aided by government incentives for purchases of low-emission cars and home electrical appliances, a Cabinet Office official said.

Overall domestic demand remained negative compared with the previous quarter because of weak corporate capital spending and slumping housing starts.

People walking in front of a construction site in Tokyo yesterday. The Japanese economy snapped a 4-quarter contraction with 0.9% growth for April-June. – AP

Exports rose 6.3% from the previous quarter, the first increase since January-March 2008 and the biggest gain in seven years.

The export increase was led mainly by robust demand for automobile and electronic goods in Asia, the official said.

Inventories shaved 0.5 percentage point off GDP in April-June, compared with a 0.2 percentage point negative contribution in the first quarter, as companies continued to adjust stock.

Public investment rose 8.1% from the previous quarter, which was the biggest gain since October-December 1998, reflecting the government’s stimulus spending.

Housing investment shrank 9.5% from the previous quarter, a bigger fall than the 5.7% drop in January-March.

The GDP deflator rose 0.5% in April-June from the previous year, a smaller increase than the previous quarter’s 0.9%. The domestic demand deflator fell 1.7%, a bigger fall than the previous quarter’s 1.0%, suggesting weak domestic demand is playing an increasing part in a deepening deflation.

The government revised up GDP for fiscal 2008, which ended on March 31, to a contraction of 3.2% from minus 3.3% in real terms and to minus 3.5% from minus 3.6% in nominal terms. — Reuters


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