Tuesday, August 18, 2009

Japan out of recession

Says who?

Japan rebound might be an opportunity for the Asian

Says who?

Japan's economy grew 0.9 per cent in the three months to
June, ending its longest recession since the Second World
War on the back of exports and government stimulus
spending. But analysts say it will be a long road to a
sustained recovery.

The growth in the world's number two economy is likely to
continue in coming quarters, providing further evidence
that the worst of the damage wrought by a global financial
crisis may be over.

It may also give the ruling party a lift ahead of a
general election, but economists and policy-makers are
wary about the outlook going into next year, which depends
on a recovery in world demand.

The preliminary figure, which fell slightly short of a
median market forecast of a 1pc increase, puts Japan in
the first camp of G7 countries that have pulled out of
recession, along with Germany and France.

"The data was driven by stimulus steps in Japan and
overseas, so Japan's economy is far from self-sustaining
growth," said Barclays Capital chief economist for Japan
Kyohei Morita.

"The growth level for the July-September quarter will
likely be similar to that of April-June, and the pace of
growth is expected to slow down thereafter as the effects
of government stimulus run their course.

It was the first period of growth in five quarters and
follows a revised 3.1pc contraction in January-March and a
3.5pc decrease in the final quarter of last year, which
was the biggest drop on record.

On an annualised basis, Japan's economy grew 3.7pc from
the first quarter, the fastest since January-March last
year. That compared with a 1pc contraction in the US in
the same quarter.

Economists expect Japanese GDP to grow 0.4pc in
July-September from the previous quarter, followed by a
0.5pc increase in October-December, a poll showed. But
economists say the recovery could lose momentum later this
year when a temporary boost from government stimulus
steps, such as one-off payments and subsidies for
energy-efficient cars and home appliances, peters out.

In the April-June period, external demand, the balance of
exports and imports, contributed 1.6 percentage points to
GDP, due in part to China's $585 billion stimulus package
and other such spending rolled out by governments around
the world to combat the global recession.

Tokyo's stimulus steps helped private consumption, which
accounts for about 60pc of the economy, to rise 0.8pc and
public investment to increase 8.1pc. (Quotes of agencies)

Seen from skyscrapers comfortable sofas, Japan's economy
looks like a funny tale. Funny or sad, so sad to see that
financial mood makers claim lots of cra...!