Japan GDP grew fastest since Q1 2008, says poll

Japan's economy likely expanded at the fastest pace in almost two years in the last quarter as a recovery in exports spurred capital spending while government stimulus supported private consumption, a Reuters poll showed.

Analysts expect the economy to have grown 0.9 per cent in the October-December quarter, the fastest growth since the first quarter of 2008. Japan pulled out of its worst recession in decades in the second quarter of last year.

On an annualised basis, the median forecast of 26 economists was for a 3.7 per cent expansion, which would also be the biggest gain in seven quarters though slower than a 5.7 per cent expansion in the US economy in October-December. "External demand contributed a lot to growth, and private consumption continued to expand," said Taro Saito, a senior economist at NLI Research Institute.

"Capital expenditure swung to growth in light of the improvement in corporate earnings. This led to the first expansion in domestic demand in seven quarters," Saito said. Preliminary fourth-quarter GDP figures are due on February 15.

Companies probably increased capital spending by 1.5 per cent in October-December after a 2.8 per cent fall in July-September, the poll showed.

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