New economic data in Japan shows the country has formally exited recession, although the growth rate is less than what was expected before.
The Cabinet Office announced Sunday that Japan’s economy grew 0.4 percent in the final quarter of 2014, meaning that the country is officially out of recession.
The revised economic data comes as the government expected a 0.6 percent growth in October-December period. However, the gross domestic product (GDP) expanded in the quarter following contraction in two previous periods.
The data also showed a 0.1 percent drop in private-sector capital investment, lower than a previously announced rise of 0.1 percent.
The GDP grew 1.5 percent on an annualized basis, down from the initial reading of 2.2 percent in February.
Technically speaking, Japan slipped into recession in 2014 after it contracted 1.9 percent in the third quarter which was preceded by a 7.1 percent shrinking in the second quarter.
An eight percent nationwide rise in the consumption tax last year seriously undermined Japan’s economy and people’s spending power. This resulted in a decision by the government to postpone another sales tax slated for October.
In October, the Bank of Japan expanded its already enormous monetary easing program to counter the slump.
Japan came out of its last recession in 2012, and experienced fairly strong growth in 2013.
MS/NN
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