Japan GDP growth revised up to 5.0% on firm consumer spending

TOKYO, June 10 Kyodo -
Japan's economy grew at a slightly faster pace in the January-March quarter
than initially thought, as consumer spending has shown increasingly bright
signs, although companies remained cautious about boosting investment,
government data showed Thursday.
Real gross domestic product in the three-month period expanded 5.0 percent on
an annualized basis for the fourth straight quarter of growth, up from the
government's preliminary report of 4.9 percent expansion and widely beating
economists' views.
On a quarter-on-quarter basis, the GDP grew 1.2 percent, unchanged from its
preliminary reading, according to the Cabinet Office.
''The Japanese economy is entering a recovery phase,'' Cabinet Office
Parliamentary Secretary Keisuke Tsumura said at a press conference, adding,
''Brightness in consumer spending is intensifying.''
Yet, Tsumura as well as economists refused to call the recovery
self-sustaining, citing continued sluggish figures of corporate capital
investment.
''Exports definitely stay among the components contributing to Japan's economic
growth along with government stimulus steps, so it is too early to say that the
recovery is autonomous,'' Yoko Takeda, senior economist at the Mitsubishi
Research Institute, said.
Consumers spent more on goods and housing than expected in the three months on
the back of stimulus measures such as the so-called ''eco-point program''
designed to induce purchases of energy-efficient products and services.
Takeda warned, however, that the effects of such measures will fade in months
to come and that the pace of recovery could slow down unless conditions of
employment and income are improved.
The government has said ''the economy has been picking up'' in its monthly
economic assessment, but has not used ''recovery.'' Tsumura's remarks suggested
that it may upgrade its assessment in the June report.
According to the Cabinet Office, external demand contributed 0.7 percentage
point to GDP growth, while the contribution of domestic demand was 0.6 point.
The readings remained unchanged.
Consumer spending and housing investment were both revised up to 0.4 percent
growth from an original estimate of 0.3 percent expansion.
Increased sales of automobiles as well as such services as public transport and
accommodation helped push up the quarter's consumer spending reading, according
to Tsumura.
Public investment shrank 0.5 percent, way narrower than an initial reading of
1.7 percent contraction.
Corporate capital spending grew at a slower pace of 0.6 percent than the
initially reported 1.0 percent.
But the figure still marks the second consecutive quarterly expansion,
indicating that companies' appetites for increasing investment are improving,
albeit gradually.
The GDP deflator, a broad indicator of price trends, climbed 0.1 percent from
the previous quarter, instead of an original estimate of 0.0 percent. It is the
first positive figure in five quarters.
But the government still maintains its view that Japan is staying in deflation,
Tsumura said.
Japan's economic growth for January-March was the highest since the April-June
quarter of 2009 and the second after Canada among major industrialized nations.
On a nominal basis, which reflects price fluctuations, GDP for January-March
expanded 1.3 percent from the previous quarter, which translates into an
annualized growth of 5.4 percent. The figures are upward revisions from 1.2
percent and 4.9 percent respectively.
For the whole of fiscal 2009 through March, meanwhile, real GDP contracted 2.0
percent, instead of the 1.9 percent shrinkage originally reported.
GDP is the total value of goods and services produced domestically.
==Kyodo