(MENAFN- Kuwait News Agency (KUNA)) Japan's economy grew at an annualized pace of 2.4 percent in the first quarter of 2015, thanks to stronger private consumption and housing investment as an impact of the sales tax hike a year ago was diminishing, the government said Wednesday.
The gross domestic product (GDP) expanded for the second straight quarter and saw the sharpest rise since the January-March period in 2014, which recorded a 4.9 percent growth, according to preliminary data released by the Cabinet Office. On a quarterly basis, the world's third-biggest economy's GDP rose 0.6 percent in the three months ended March 31 from the October-December period.
"Japan's economy is making progress in shaking off the deflationary mindset," Economy and Fiscal Policy Minister Akira Amari told a press conference after the Cabinet released GDP data. "It is important that company will take more risks and invest to achieve further economic recovery," Amari added.
In regard to foreign demand, exports; one of the key engines of nation's economic recovery, increased 2.4 percent, due partly to rise in auto exports to the US and purchases of goods by foreign tourists visiting Japan.
On the domestic front, personal consumption, which accounts for about 60 percent of Japan's GDP, gained 0.4 percent, up for the first time in three quarters. The improvement suggested a moderate recovery in consumer spending after a setback triggered by the sales tax hike in April last year, from the 5 to 8 percent.
Corporate capital spending, another key pillar of domestic demand, also rose 0.4 percent. Housing investment also expanded 1.8 percent. The GDP deflator, a gauge of overall price movements, was up 3.4 percent from a year earlier, suggesting that the economy appears on track to emerge from 15 years of deflation.
Nominal GDP, which is before adjusting for inflation, grew 1.9 percent on quarter, or an annualized 7.7 percent. GDP is the total value of goods and services produced domestically.
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