Japan economic growth better than expected

TOKYO, May 16 (UPI) -- Japan's economic growth in the first quarter of 2008 came in better than expected, spurred by exports, the government said Friday.

The quarterly gross domestic product rose 0.8 percent for an annualized 3.3 percent growth rate, the third consecutive quarterly increase, the Cabinet Office said in its preliminary report.

The figures exceeded the average market forecast of 0.6 percent quarterly gain and 2.6 percent annualized rate, Kyodo News reported.

Japanese Economic Minister Hiroko Ota credited firm external demand for the latest results but also called for caution in the future because corporate capital spending had posted a negative figure.

The minister said continuing rise in the prices of food and other consumer goods also had adversely affected consumer sentiment.

But economist Masahiko Hashimoto at the Daiwa Institute of Research told Kyodo exports will continue to be robust with strong demand from China and oil-producing countries in the Middle East. He said the next three months may see slight declines "but we do not expect that the Japanese economy will worsen and fall into recession."

He said a projected recovery in the U.S. economy later this year also will help.