The Japanese economy grew 0.3 percent in the April to June quarter from the preceding quarter, or at an annualized pace of 1.4 percent, in real terms, the Cabinet Office said in a preliminary report on Monday.
It was the fourth consecutive quarterly expansion, but the pace of growth slowed significantly from the January to March quarter, when the economy posted a revised annualized growth rate of 5.5 percent. The pace of growth in the April to June quarter was much slower than most analysts had expected.
Growth in the Japanese economy, as measured by gross domestic product, slowed significantly in the April to June period as exports lost steam amid the eurozone financial and fiscal crisis and the domestic economy also showed signs of faltering.
Consumer spending, which accounts for nearly 60 percent of Japan’s GDP, edged up 0.1 percent in the April to June quarter on a quarter-on-quarter basis. The pace was much slower than 1.2 percent growth in the previous quarter.
Public investment showed relatively strong growth of 1.7 percent on a quarter-on-quarter basis, albeit at a slower pace than 3.6 percent in the preceding quarter, due to demand related to reconstruction efforts from the devastating earthquake and tsunami that hit northeastern Japan in March 2011.
Corporate capital investment rose for the first time in two quarters, increasing 1.5 percent on a quarter-on-quarter basis.
The quarter-on-quarter pace of growth in exports slowed significantly to 1.2 percent in the April to June period from 3.4 percent in the January to March period.
In addition to renewed concerns about the eurozone crisis, a stronger yen has weighed on Japanese exports, as it makes Japanese products more expensive in overseas markets.
Japan is now the world’s third largest economy after the United States and China and is heavily dependent on exports for growth.
In nominal terms, or before adjustment for price change, the Japanese economy shrank 0.1 percent in the April to June period on a quarter-on-quarter basis, or at an annualized pace of 0.6 percent, amid continued deflation.
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