Japan's gross domestic product (GDP) in the October-December quarter increased 1.1 percent in real terms or an annualized 4.6 percent from the previous quarter, marking expansion for three consecutive quarters. GDP for all of 2009 fell 5 percent in real terms from 2008 — the worst contraction since the end of World War II.
Relatively good performances that followed a serious slump in the January-March quarter appear to have prevented the Japanese economy from falling into a second dip. Yet the grim employment situation and the downward wage trend do not warrant optimism that economic growth will continue.
In nominal terms, which are thought to better reflect people's feelings about economic conditions than real terms, GDP in the last quarter increased 0.2 percent from the previous quarter or an annualized 0.9 percent — the first rise in seven quarters. But the GDP deflator, a key gauge of price trends, dipped a record 3 percent from a year before, indicating deflation's grip on Japan.