Japaneses growth estimated at 6.1% for 2004

Here is the story from the BBC online (9 Jun 04)

Japan's economic growth forecasts have been revised upwards as the recovery gathers steam.
Bulging demand has pushed estimates to 6.1% for the full year, up from the previous estimate of 5.6%.

Gross Domestic Product (GDP) grew 1.5%, in real terms, in the first quarter up from the previous estimate of 1.4%.

Japan is the world's second biggest economy and now looks set to outstrip US growth of 4.4% annualised for the same period of January-March.

It is welcome news for Prime Minister Junichiro Koizumi, attending the G8 summit, as he faces another election in just a few weeks time.

Mr Koizumi returned to power with a majority government in November's general election and now faces upper-house elections in July, which could make or break his current second-term premiership.

Boost

A strong economy in Japan was also welcomed by President Bush attending the G8 summit.

Showering Mr Koizumi with praise Mr Bush said, "The first thing, of course, I will do is congratulate him on the fact that the Japanese economy is improving under his leadership."

In a meeting between the two leaders Mr Koizumi claimed the recovery in Japan was a result of his policy of "no growth without reforms".

His administration has made reforms at government agencies and urged the same at private-sector firms since Mr Koizumi took office three years ago.

China factor

The wider picture reveals that Japan also owes its change of fortune to booming export demand from China and other fast-growing countries in the region.

Recent industrial output figures showed a 3.3% rise in April compared to March and reinforced hopes that the recovery is sustainable.

Japan's economic growth hit a 13-year high in the last quarter of 2003.

stephenmunday said:

Japan's economic growth forecasts have been revised upwards as the recovery gathers steam.
Bulging demand has pushed estimates to 6.1% for the full year, up from the previous estimate of 5.6%...

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I long thought it quite funny how people dismissed Japan as a total basket case that would never recover. There was never any logic to that.

Not so fast ! If it is true that the economic growth for January to March 2004 was 6,6%, April to June dropped to a mere 0,4%. We will see how the second half of the year goes, but I doubt that the annual average will even be of 5% in the best case scenario.

Japan Times : 0.4% GDP rise rains on parade

Japan Times said:

Japan's economy expanded 0.4 percent in the April-June quarter from the previous quarter, sharply slowing on lackluster corporate investment and consumer spending, Cabinet Office data showed Friday.
The gross domestic product, or the value of goods and services produced domestically, grew at an annualized rate of 1.7 percent. It was a sharp drop from a revised growth of 6.6 percent in the January-March period and 7.4 percent growth in the October-December quarter.

The real GDP, adjusted for price changes, grew for the fifth straight month as prices continued to fall. But the nominal GDP shrank 0.3 percent in the first contraction in five quarters.

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