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Japan Q1 GDP rises 1.5% q-o-q, fastest in nearly three years

LiveMint logoLiveMint 15-05-2014 Tetsushi Kajimoto

Tokyo: Japan’s economy grew 1.5% in January-March from the previous quarter, posting its biggest expansion since July-September 2011, as consumer spending jumped ahead of an 1 April sales tax increase, government data showed on Thursday.

Capital spending also grew far faster than expected.

The preliminary figure for gross domestic product compared with 1% growth forecast by economists in a Reuters poll. It followed a revised 0.1% rise in the final quarter of last year, Cabinet Office data showed.

The first-quarter GDP figure translated into annualised growth of 5.9%, versus 4.2% growth expected by economists.

Private consumption, which accounts for about 60% of the economy, increased 2.1% on the quarter, its fastest growth since January-March 1997. That was in line with a 2.1% gain forecast by economists.

Capital spending, seen as key for sustained growth in the world’s third-largest economy, grew 4.9%, far exceeding a projection for a 2.1% rise and marking its biggest gain since October-December 2011.

External demand shaved off 0.3 percentage point from quarterly growth, reflecting Japan’s hefty trade deficit as exports remain sluggish and demand for imports of fuel and other goods stays strong. Reuters

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