JAPAN GDP GROWS MORE-THAN-ESTIMATED 4.1%
Keiko Ujikane and Shamim Adam
Bloomberg Business Week, May 17, 2012
Japan’s economy expanded faster than estimated in the first quarter, boosted by reconstruction spending that’s poised to fade just as a worsening in Europe’s crisis threatens to curtail export demand.
Gross domestic product rose an annualized 4.1 percent from the final three months of 2011, exceeding all but seven of 27 estimates in a Bloomberg News survey of economists, a Cabinet Office report showed today in Tokyo. Singapore also reported a rebound in growth last quarter, while warning about the risk of a disorderly European debt default.
Policy makers across Asia are girding for the impact of any Greek exit from the euro region that could roil the global financial system, with Malaysia’s central bank chief seeing possible “catastrophic” consequences for Europe. South Korea said it has enough currency reserves to weather the storm, while in Japan, pressure may rise to step up monetary stimulus and act against what the government calls “excessive” currency moves.
“Japan is on a steady recovery path but this high growth probably won’t continue,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co. in Tokyo. “The Bank of Japan probably wants to wait and see the effect of their monetary easing but as economic data will show more moderate growth going forward, they are likely to face an increase in political pressure for more actions.”
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