The government on Thursday revised economic growth upward for the January-March quarter to a real 0.1 percent growth over the previous quarter, following its preliminary prediction of a 0.2 percent contraction.

The revision means the economy can avoid, for a little longer, the recession label, which is affixed after two consecutive quarters of negative growth.

The growth instead marked the second consecutive quarterly rise. The figure, measured in terms of gross domestic product, translates to an annualized growth of 0.5 percent, up from the earlier estimated contraction of 0.8 percent, the Cabinet Office said.

The revised figure may give Prime Minister Junichiro Koizumi maneuvering room as he pushes reforms in the fiscal 2002 budget amid mounting criticism from his own party that cutting government expenditures will worsen the economy.

The revised data push up the GDP growth pace to 1.0 percent for fiscal 2000, up from the preliminary 0.9 percent. The revised fiscal year figures are still shy of the state’s target of 1.2 percent.

GDP is the total value of goods and services produced domestically. Real GDP figures are adjusted for inflation and seasonal variations.

A Cabinet Office official said the upward revision was made largely because of a revision in the calculating method for data on single-person household expenditures.

Personal spending, which accounts for about 60 percent of GDP and is considered key to an economic recovery, was revised upward to 0.6 percent growth from the preliminary estimate of no growth.

Corporate investment in plants and equipment was also revised upward to minus 0.9 percent from the preliminary minus 1.0 percent.

The Cabinet Office also said the government’s target of 1.7 percent growth for 2001 will be achieved if there is a quarterly expansion of 0.5 percent in each remaining quarter.

However, some economists project an economic growth contraction for the April-June quarter. April-June GDP data will be announced Sept. 7.

Relevant ministers, including Heizo Takenaka, state minister in charge of economic and fiscal policy, have said it will be difficult to achieve the 1.7 percent growth target because of sluggish exports and industrial output.

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