Japan's economy seen growing at slower pace
Afp, Tokyo
The Japanese economy likely grew in the first three months of this year but at a slower pace as households and companies find their wallets cannot sustain recent heady expansion, analysts say. The world's second largest economy is in the midst of its longest post-World War II expansion, but some experts worry about the health of consumer spending, which makes up 55 percent of gross domestic product (GDP). Economists expect the government Thursday to announce GDP grew by 0.7 percent between January and March compared with the fourth quarter of 2006 -- an annualised rate of 2.6 percent. It would be the ninth straight quarter of growth but a sizable step down from the 1.3 percent GDP growth, or annualised 5.5 percent, between October and December, which was Japan's fastest expansion in three years. "Consumer spending remained brisk, thanks to relatively warm weather, which buoyed spending on spring clothing, as well as firm outlays on flatscreen TVs, cellphones and game machines, thereby leading the sustained expansion of the overall economy," Daiwa Institute of Research senior economist Junichi Makino said of the first quarter. "But given the fact that the recent solidity of consumer spending was not accompanied by rises in wages, we need to watch carefully to see if households can sustain the hike in their outlays," Makino said.
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