• Kyodo News


The January-March economic growth figure was revised upward to an annual pace of 3.3 percent, mainly because corporate investment was stronger than initially estimated, the government said Monday.

The preliminary figure was 2.4 percent.

The expansion over the previous three-month period, measured in terms of gross domestic product, represents the ninth consecutive quarterly growth. GDP showed a 0.8 percent increase from the October-December period, compared with the initially reported 0.6 percent expansion, the Cabinet Office said.

The revised report said capital investment climbed a real 0.3 percent from the previous quarter, a turnaround from a 0.9 percent fall in the initial report.

“The upward revision in capital investment, which stemmed from robust demand-side data that became available after the preliminary report, contributed most to lifting the revised overall GDP data in the January-March period,” a Cabinet Office official said.

A quarterly survey released by the Finance Ministry earlier this month showed Japanese companies boosted capital investment by 14.2 percent in the first quarter from a year before, excluding software investment.

Private-sector economists said the latest GDP data underline the firm undertone of the economy.

“The GDP upward revision reconfirmed that the Japanese economy has continued to stably expand around 2 percent in real terms,” said Takuji Aida, chief economist at Barclays Capital Japan Ltd.

Given a recent rebound in industrial production and bullish forecasts for the coming few months, the economy will probably post an annualized 1.8 percent growth in the April-June period from the previous quarter, Aida said.

“The estimate will be a slowdown compared with the headline reading in the January-March period, but it will be within the range of the potential growth rate (of 1.5 percent to 2.0 percent),” he said.

With the January-March GDP data, economic growth for all of fiscal 2006 was revised upward to 2.1 percent from an initially reported 1.9 percent, matching the government projection.

The Cabinet Office said the economy will need to rise 0.2 percent, or an annualized 0.8 percent, in each of the four quarters for fiscal 2007 to achieve the government’s projection of annualized real 2.0 percent expansion.

On a nominal basis, GDP grew 0.5 percent in the January-March quarter, or an annualized 2.1 percent, compared with the preliminary report of a 0.3 percent quarterly increase, or an annualized 1.2 percent growth.

Personal spending, which accounts for about 55 percent of Japan’s GDP, rose a real 0.8 percent, revised downward from a 0.9 percent increase.

Exports gained a real 3.3 percent, unchanged from the preliminary report, while imports increased 0.4 percent, revised downward from the initially reported 0.9 percent rise.

Housing investment contracted by a real 0.5 percent, compared with an initially reported 0.3 percent fall. Public investment shrank 1.2 percent, revised sharply downward from the preliminary 0.1 percent decline.

The GDP deflator fell 0.3 percent in the January-March quarter from a year earlier, revised from the initially reported 0.2 percent decline.

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

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