Tokyo, Aug 16 (DPA) Japan’s economy expanded at an annualized pace of 0.4 percent in the April-June quarter, a weak result that allowed China to overtake it as the world’s second-largest economy, the government said Monday.
It was the third consecutive quarter of growth, but the pace was much slower than the annualized 2.3-percent increase predicted by economists in a Kyodo News survey.
Quarterly gross domestic product (GDP) grew by 0.1 percent year-on-year, the Cabinet Office said in a preliminary report.
It said economic output for the quarter stood at $1.29 trillion, less than China’s $1.34 trillion on an unadjusted, comparable basis. It also expected China to outpace Japan as the world’s second-biggest economy on a yearly basis during 2010.
‘I believe the latest data show the economy continued to steadily pick up in the April-June quarter,’ Economy and Fiscal Policy Minister Satoshi Arai said.
But Arai added the government needs to keep an eye on downside risks, such as overseas economies and financial markets.
‘The economy may be said to have already entered the stage of levelling off,’ Bloomberg financial news agency quoted Keisuke Tsumura, a parliamentary secretary at the Cabinet Office, as saying.
Quarterly spending was unchanged from the previous period, while corporate capital spending rose 0.5 percent and public investment declined 3.4 percent.
Growing demand from overseas contributed to Japan’s economic recovery. External demand pushed up GDP by 0.3 percentage points but weak domestic demand drove it down by 0.2 percentage point.
Exports grew by 5.9 percent, compared with a seven percent increase in the previous quarter.
