Japan’s Q1 growth revised upwards


Official data today revealed Japan’s annualised economic growth expanded in the first quarter at an annualised rate of 5%, higher than the initial estimate of 4.9%.

On a quarterly basis, however, the reading remained unchanged at 1.2%, according to the Cabinet Office.

Japan was one of the first major economies to emerge from recession in the second quarter of 2009 – boosted by the countrya��s dependence on exports.

Exports, particularly to emerging Asian markets such as China, are fuelling Japan’s recovery, surging 40.4% in April on year, according to the latest figures from the Finance Ministry.

However, the worlda��s second largest economy continues to battle with deflation.

Japana��s core consumer price index, which excludes volatile fresh food prices, fell 1.5% in April from a year ago a�� representing the 14th straight month of decline and larger than a 1.2% fall in March.

Deflation (where prices fall rather than increase) can be a serious threat to an economy because it deters consumers and businesses from spending in expectation of falling prices.

Japan has battled with deflation in the past and was a problem for the economy during its so-called a�?Lost Decadea�? in the 1990s in which the economy struggled with falling prices.

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