If the accuracy of the Japanese finance ministry’s revision of their GDP estimates are to be believed, then it appears the Nippon economy is, finally, awakening from its ‘Lost Decade’ of economic slumber following the collapse of its once heralded economy. But acording the their finance ministry, Japan’s GDP expanded +4.6% in 4Q 2009. This latest development is welcomed news, adding more economic muscle to the resurgent global economy.
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(NYT) TOKYO — The Japanese economy grew at an annualized pace of 4.6 percent in the final quarter of 2009, preliminary numbers showed Monday, as a rebound in exports helped alleviate fears of a “double-dip” recession. Still, economists forecast that growth would slow this year amid sluggish domestic demand and that Japan was likely to be overtaken by China as the world’s second-largest economy, behind the United States. The growth figure for the final three months of 2009 — after no growth or a decline the previous quarter — is the first economic report card for the new government in Tokyo, which swept to power in September on promises to change Japan’s postwar economic order. The Democratic Party has promised to support the country’s households better by improving social welfare, including new cash payments to families with small children.
Recent months have been a period of turmoil as the Democrats reduced some of the stimulus spending introduced by the previous government to secure funds for their own policies — hurting the economy in the short term. “The economy has shown some signs of brightness,” Finance Minister Naoto Kan said. “Risks for a double-dip recession are receding. But downside risks exist, such as in the employment situation and overseas economies, so we can’t be optimistic,” Mr. Kan said.
The figures released Monday will also act as a test of recent changes that Japan has made in the way it measures economic activity. Tokyo has come under increasing pressure to address wild variations in its readings of gross domestic product: In the third quarter last year, the government initially said the economy had grown a robust 4.8 percent, only to revise that rate down to reflect no growth or decline. The latest numbers, the government says, have been adjusted for more accuracy. Specifically, the Cabinet Office said last week that… Read more from the NY Times here.
Source: NY Times Image: The Economist, 14 Feb 2009
