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Japan's economy exits two-quarter recession, experiences slow growth

By
Andrew V. Pestano
Japanese yen banknotes. File photo chrupka/Shutterstock
Japanese yen banknotes. File photo chrupka/Shutterstock

TOKYO, Feb. 16 (UPI) -- Japan, the world's third largest economy, exited two quarters of consecutive recession, but growth was lower than expected.

Japan's gross domestic product in the fourth financial quarter grew an annualized 2.2 percent, lower than the predicted growth of 3.6 percent by economists.

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A decrease in consumer spending due to a sales tax increase is partly responsible for the slow growth.

Japan's economy contracted 7.3 percent in the second quarter and 1.6 percent in the third.

About half of the economic growth was fueled by exports, which increased 2.7 percent in the fourth quarter, but growth from exports may not be last in Japan.

"I am a little concerned about the outlook for exports," Goshi Kataoka, senior analyst at Mitsubishi UFJ Research and Consulting Co., told the Wall Street Journal. "The current pace of export growth is unlikely to be sustained."

Private spending increased 0.3 percent in the fourth quarter -- lower than economist's expected increase of 0.7 percent. Private consumption accounts for 60 percent of the Japanese economy.

Household spending increased by 0.3 percent and unemployment fell to 3.5 percent.

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