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Japan Q2 GDP +0.9% q/q, first growth in 5 quarters

Published 08/16/2009, 07:55 PM
Updated 08/16/2009, 08:00 PM

TOKYO, Aug 17 (Reuters) - Japan's economy grew 0.9 percent in April-June from the previous quarter, marking the first expansion in five quarters on the back of exports and government stimulus, but analysts say it faces a long road to a sustained recovery.

The growth puts Japan in the first camp of G7 countries that have pulled out of recession, along with Germany and France, after the global financial crisis dragged much of the developed world into its deepest slump in decades. It compared with a median market forecast of a 1.0 percent increase.

Japan's gross domestic product (GDP) figure translates into an annualised rise of 3.7 percent, smaller than a 3.9 percent expansion expected by economists, as exports rebound and government stimulus boosts personal consumption and public investment.

It follows revised contractions of 3.1 percent and 3.5 percent in the previous two quarters.

The U.S. economy shrank at an annual clip of 1.0 percent in April-June, a much smaller drop than in January-March. GDP in the euro zone fell by a marginal 0.1 percent in April-June, after a 2.5 percent fall in the first quarter, a sign the recession may be winding down.

Economists say Japan's recovery could lose momentum later this year when effects of government stimulus peter out, while many companies slash jobs and cut back on capital spending to cope with weak demand both at home and abroad.

They expect Japan's economy to grow 0.4 percent in July-September from the previous quarter, followed by a 0.5 percent increase in October-December, a Reuters poll showed. (Reporting by Tetsushi Kajimoto, Stanley White; Editing by Hugh Lawson)

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