Japan revises economic growth upward

Japan's economic growth rate has been revised upward to an annual pace of 1 per cent for the April-June quarter as its economy…

Japan's economic growth rate has been revised upward to an annual pace of 1 per cent for the April-June quarter as its economy expanded for a sixth straight quarter on the back of healthy private consumption.

The move represents an improvement over the annualised rate of 0.8 per cent that the government announced last month in a preliminary report.

The revision in GDP was due to overall private demand being raised to a 0.9 per cent increase from a preliminary 0.7 per cent rise, with its contribution to GDP rising to a positive 0.7 points from an increase of 0.5 points.

Although the revision underlines Japan's strong economic recovery, the new figure was still lower than the 1.7 per cent annual expansion forecast last month by economists surveyed by Dow Jones Newswires.

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Tokyo is forecasting 2.1 per cent growth for the fiscal year ending March 31, 2007.

In the past, Japan relied mostly on exports, especially to the United States, to keep growth going, but spending by consumers and companies have bolstered the economy in recent months.

Monday's revised figures showed that private consumption, which accounts for half of Japan's GDP, grew 0.5 per cent in the second quarter, unchanged from last month's preliminary figures.

But capital expenditure was revised down slightly to a 3.7 per cent on-quarter increase, from a preliminary reading of 3.8 per cent. But figures still show that companies are investing in capital at a rate not seen in nearly four years.