Recession Is Over in Japan

If it takes two successive quarters of falling GDP to enter a recession, how can a country emerge from recession with only one quarter of growth? In the past week or so, journalists have declared the recession over in France, Germany and now Japan . Of course, most reports rightly ask how long this will last and stress that a genuine recovery is far from certain , Reuters Blogs reports.

Meanwhile, government figures showed that the economy expanded by 0.9% in the three months to June, which is equivalent to nearly 4% annual growth rate.

However, Japan's economic health is far from robust, and the government warned that the recovery is still fragile.

"The outlook remains severe, but we expect the economy to head towards a recovery," said economic and fiscal policy minister, Yoshimasa Hayashi.

Although the headline growth figure was strong, the detail revealed weakness still exists.

Residential investment fell by 9.5% and private demand shrank by 1.3% , Sky News reports.

However, for the first time in five quarters, Japanese GDP is back to rising: in the second quarter it saw +0.9%, compared with -3.1% in the first quarter and -3.5% in the fourth quarter of 2008.
On the year the growth was even greater, at +3.7%. Leading the Japanese recovery is the export sector, which rose by 6.3% (first increase in 5 quarters) , AGI - Agenzia Giornalistica Italia reports.