Japan’s Revised G.D.P. Data Shows Strong 2nd Quarter

Written By Unknown on Senin, 09 September 2013 | 13.08

TOKYO — Japan's economy expanded much faster than initially thought in the second quarter, data showed Monday, adding to growing signs that a solid recovery is taking hold and strengthening the case for a planned sales tax increase next year.

A marked improvement in capital expenditure led to an upward revision in April-June gross domestic product to an annualized 3.8 percent expansion from a preliminary 2.6 percent increase, according to data released by the Cabinet Office. The expansion, which roughly matched a median market forecast for a 3.7 percent increase, underscores the strength of Japan's recovery.

It was the third consecutive quarter of increase after 4.1 percent growth in January-March. On a quarter-to-quarter basis, G.D.P. growth was revised up to a 0.9 percent increase from a preliminary 0.6 percent.

Japan emerged from recession in 2012, and data for much of this year has shown the benefits of Mr. Abe's reflationary policies and the Bank of Japan's s aggressive stimulus program.

Preliminary G.D.P. data for April-June fell short of market forecasts because of weaker-than-expected capital spending, casting doubt on whether the tax increase would proceed as scheduled.

But capital expenditure was revised up to a 1.3 percent increase from the preliminary 0.1 percent decline, suggesting that improving business sentiment is prompting companies to spend more on plants and equipment.

The government had cited revised G.D.P. data as among key factors in deciding whether to go ahead with raising the sales tax to 8 percent from 5 percent in April, and to 10 percent in October 2015. Mr. Abe is expected to make a decision early October.


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