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Business News/ News / World/  Japan’s economy grows more than estimated on investment gains
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Japan’s economy grows more than estimated on investment gains

GDP expanded an annualized 3.9%, more than a preliminary 2.4%, according to revised data from the Cabinet Office

Prime Minister Shinzo Abe is increasing pressure on Japan Inc. to plow its cash hoard and record profits into investment, which remains below 2008 levels. Photo: AFPPremium
Prime Minister Shinzo Abe is increasing pressure on Japan Inc. to plow its cash hoard and record profits into investment, which remains below 2008 levels. Photo: AFP

Tokyo: Japan’s economy grew at a faster pace than initially estimated in the first quarter, on a stronger pickup in business investment and inventory buildup.

Gross domestic product (GDP) expanded an annualized 3.9%, more than a preliminary 2.4%, according to revised data from the Cabinet Office. The median forecast of 26 economists surveyed by Bloomberg was for 2.8% growth.

Prime Minister Shinzo Abe is increasing pressure on Japan Inc. to plow its cash hoard and record profits into investment, which remains below 2008 levels. The challenge is to convince businesses to build facilities in an economy with a shrinking population and mounting debt burden. Higher investories risk weighing on production ahead.

“Capital spending is the last piece of the puzzle, with exports and consumption showing signs of recovery," Atsushi Takeda, an economist at Itochu Corp. “A sustainable economic recovery is starting."

Business investment gained 2.7% from the previous quarter, more than an initial estimate of 0.4%. Inventories, which ballooned after a sales-tax increase last year hurt demand, added 0.6 percentage point to the economy’s expansion. Bloomberg

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Published: 08 Jun 2015, 09:19 AM IST
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