Revised GDP figures bring Japan back into positive growth territory

Second preliminary figures show that growth was up 0.1% from October to December last year, slightly better than the 0.1% drop originally reported by the Cabinet Office in February.

According to the revised figures, domestic demand was up 0.2% instead of 0.1% in the fourth quarter; however, private consumption remained unchanged after the revision, down by 0.3%.

The Japanese economy shrank in the second and third quarters of 2004, falling 0.3% in each period. This put the country into a technical recession after GDP figures for the third quarter were revised downwards last month.

In its monthly report released last week, the Bank of Japan said that the economy is recovering at a moderate pace and is expected to continue to do so for the foreseeable future. The central bank is also expecting exports and production as well as domestic demand to continue to pick up this month. Employment is also getting better and household income has stopped declining, according to the report.

However, on the investment side, while the BoJ notes that business fixed investment in manufacturing is improving because of rising corporate profits, it says housing investment has remained flat. The bank is also projecting public investment to remain on a downward trend.

Last week’s figures also reflected a 1.3% gain in the exports of goods and services, a 0.1% revision on February’s first preliminary figure of 1.2%.