The economy expanded an annualized real 1.5 percent in the April-June quarter, better than the initially reported 0.4 percent thanks to a boost in corporate capital investment, government data showed Friday.
Despite the improvement, the economy still grew at a slower pace than in the previous quarter amid the diminishing effects of fiscal stimulus, and government officials expressed caution about the future outlook.
“The direction that the economy is picking up has not changed,” Satoshi Arai, state minister for economic and fiscal policy, told a news conference. Finance Minister Yoshihiko Noda made similar remarks.
The growth in gross domestic product corresponds to an expansion of 0.4 percent from the previous quarter through March, revised upward from the earlier announced 0.1 percent rise, according to revised data from the Cabinet Office.
As for the outlook, however, Cabinet Office Parliamentary Secretary Keisuke Tsumura warned of risks such as the yen’s rise and the slowdown in the global economy.
“The prospects do not allow optimism,” Tsumura said.
Capital spending was revised upward to 1.5 percent growth from the originally estimated 0.5 percent expansion. Private inventory, which pushed down the GDP by 0.2 percentage point in the initial estimate, was also revised upward to a negative contribution of 0.1 point.
Tsumura said he can evaluate the expansion of capital spending that continued for three straight quarters as a “move toward a self-sustaining recovery.”
Some economists predicted that GDP for three months through September will maintain positive growth partly because consumer spending is likely to get a boost toward the end of this month from last-minute demand for a government subsidy program to encourage purchases of environmentally friendly vehicles.
But with car sales expected to drop once the surge ends and with exports likely to grow at a sluggish pace amid the expected slowdown of the U.S., Chinese and other economies, Yasuo Yamamoto, an economist at the Mizuho Research Institute, said October-December GDP will likely turn into negative growth.
According to the Cabinet Office, external demand contributed 0.3 percentage point to GDP growth, unchanged from the initial report, while the contribution of domestic demand came in at 0.04 percent, up from the 0.2 percent negative contribution.
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