Japan Reports Stronger Economic Growth In Q4

By Agence France-Presse Japan reported Feb. 18 its strongest economic growth in over 13 years in the last quarter of 2003, suggesting the world's second largest economy could finally be turning the corner after more than a decade of gloom and stagnation. At the same time, economists and policymakers remained wary on the outlook and hesitant to declare the worst over in light of previous false dawns, continuing deflationary pressures and uncertainties on U.S. growth. The government said booming Asian demand for Japanese digital consumer electronics and automobiles prompted companies to boost investment in upgrading plant and equipment in the three months to December, building on a trend. Combined, exports and capital investment drove gross domestic product (GDP) growth up to a better-than-expected 1.7%, the highest rate since the ending of the bubble economy 13 years ago and compared with 0.6% in the previous quarter to September. On an annualized basis, growth hit 7%, also the highest since the last days of the economic bubble, in April through June 1990, when the economy expanded 10.5%. Average forecasts had been for 1.2% quarterly growth and an annualized rate of some 5%. For the whole of 2003, the world's second-largest economy grew 2.7%, reversing a 0.4% contraction in 2002. Corporate capital spending jumped 5.1% in the October-to-December period, reversing a 0.2% drop in the previous quarter, while private consumption rose 0.8%. Copyright Agence France-Presse, 2004