The economy grew an annualized real 4.6 percent in the October-December quarter for the third consecutive quarter of expansion as corporate capital investment revived amid a recovery in exports while consumer spending continued to perk up on stimulus measures, the government said Monday.
The Cabinet Office also said nominal GDP stood at $5.08 trillion in 2009, narrowly surpassing that of China’s $4.91 trillion. However, the data suggest the Japanese economy will be surpassed by China’s in the near future, possibly this year, it said.
The expansion marked in the three-month period corresponds to a 1.1 percent rise from the July-September quarter, the Cabinet Office said. It compares with a revised 0.01 percent gain in the previous quarter.
“Fears of the nation’s economy falling into a double-digit recession have faded a little,” Finance Minister Naoto Kan said.
But Kan, also the state minister for economic and fiscal policy, warned against complacency, saying employment and overseas economic conditions are still uncertain.
The October-December figures beat the average market forecasts of an annualized 3.5 percent increase and 0.9 percent quarterly growth.
The pace of the economic recovery accelerated sharply as domestic demand contributed to GDP growth for the first time in seven quarters on pickups in consumer spending and corporate investment in plant and equipment.
Despite the stronger growth in the quarter, the economy for all of 2009 logged a 5.0 percent decline from the previous year, the largest contraction since the government began compiling comparable data in 1955, due to a serious slump logged in the January-March period amid the global financial crisis, the office said.
The contraction sharply surpassed the previous record shrinkage of a 2.0 percent drop in 1998.
In October-December, consumer spending — which makes up about 60 percent of GDP — increased for the third straight quarter, up a real 0.7 percent from the July-September period, largely backed by government incentives for the purchase of energy-saving home electronic appliances and greener cars.
Corporate capital spending rose 1.0 percent for the first expansion in seven quarters. But public investment fell 1.6 percent.
“It was quite surprising” to see an increase in consumer spending, even considering the government’s incentives for purchases of environmentally friendly products, Minoru Nogimori, an economist at Nomura Securities Co., said, referring to falling wages and a record drop in winter bonuses.
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