Japan’s economy has expanded for the second straight quarter, but optimism may not be warranted. Although real gross domestic product for July-September grew 1.2 percent from the previous quarter or at an annualized rate of 4.8 percent — the largest rise since the 5.7 percent annualized growth for January-March 2007 — it may be too early too consider the recovery self-sustainable.
The 0.7 percent quarterly rise in consumer spending, which accounts for about 60 percent of Japan’s GDP, was supported by tax cuts on low-emission cars and a reward program for purchasing environment-friendly consumer electronics — steps taken by the previous administration. An array of stimulus efforts like these is losing steam as the funds run out.
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