The economy grew at a pace slower in the October-December quarter than economists expected, underscoring risks to the recovery as the first stage of the consumption tax increase looms in April.

Gross domestic product expanded an annualized 1 percent from the previous quarter, the Cabinet Office said Monday, below the lowest estimate of 1.1 percent in a Bloomberg survey of 37 economists that generated a median projection of 2.8 percent.

While capital spending rose by the most in two years and consumption picked up, trade deficits from surging imports and limited gains in exports dragged on the expansion.