TOKYO — Japan’s economy grew more than expected in the July
to September quarter, government data showed Monday, suggesting stimulus steps
helped keep the nascent economic recovery on track in the period.
When adjusted for deflation, gross domestic product rose 1.2
percent in the quarter from the April-June period, or 4.8 percent on an
annualized basis. Economists polled by Dow Jones Newswires had expected a 0.6
percent on-quarter increase and an annualized increase of 2.2 percent in the
latest period.
External demand, or exports minus imports, contributed 0.4
percentage points to growth, the Cabinet Office data showed.
Corporate capital investment rose 1.6 percent, up for the
first time in six quarters. Domestic demand added 0.8 percentage points to
growth.
Economists raised questions about the sustainability of the
improved pace of growth, as the new administration led by Prime Minister Yukio
Hatoyama hasn’t yet implemented domestic-demand boosting measures.
“No need to pooh-pooh faster-than-expected growth. But
structurally, the economy remains highly vulnerable to external demand swings.
Capex and inventories almost certainly reflected continuing external demand
recovery, the rate of which may not be sustainable,” said Cantor
Fitzgerald economist Uwe Parpart.
“We have yet to see any of the highly touted
domestic-demand boosting measures of the new government. If growth deceleration
is to be avoided, it’s high time for them to begin to kick in,” Parpart
said in e-mailed comments.
After the data were released, Deputy Prime Minister Naoto
Kan said the government intends to maintain its plan to spend 2.7 trillion ($29
billion) in a supplementary budget.
Via McClatchy-Tribune News Service.
