Figures reveal slowdown in Japanese economy

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The Independent Online

Japan's economy lost significant momentum last quarter as receding growth at home and abroad stunted its shaky recovery.

Gross domestic product grew at an annualised rate of 0.4%, the government said today.

The result undershot analysts' expectations and represents a sharp slowdown from the previous quarter's revised 4.4% expansion.

In its survey of economists, Kyodo news agency had estimated an annualised 2.3 % rise.

"The economy may be said to have already entered the stage of levelling off," Cabinet official Keisuke Tsumura told reporters.

On a quarterly basis, GDP - or the total value of the nation's goods and services - grew 0.1% from the January-March period, the Cabinet Office said in its preliminary report.

Japan was benefiting from blistering growth in Asia to fuel exports and production. Government stimulus measures also helped consumption at home, but they were not enough to bolster overall domestic demand.

Consumer spending, which accounts for about 60% of GDP, was flat from the previous quarter, the data showed. Capital spending by companies rose 0.5%, while public investment fell 3.4%.

"We are now seeing a pause of growth, especially on the domestic side," said Masamichi Adachi, senior economist at JPMorgan Securities Japan.



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