Japan ups GDP growth to 3.8 percent in April-June
APTOKYO--Japan's economy expanded faster in April-June than earlier reported, according to a revised estimate showing a real annualized growth rate of 3.8 percent, thanks to higher spending on private and public investment.
September 10, 2013, 12:04 am TWN
The first preliminary estimate had put the rate of growth for the world's third-largest economy at 2.6 percent.
The Cabinet Office also said Monday that the economy expanded 0.9 percent from the previous quarter, compared with an earlier estimate of a 0.6 percent increase.
The stronger data make it more likely the government will go ahead with a planned sales tax increase that some economists worry could slow the recovery, but which is needed to help curb the country's massive national debt.
“But the ongoing large reliance on consumer and government spending suggests that some accompanying fiscal stimulus will be needed to prevent growth from slowing too sharply,” said a commentary from Capital Economics.
Corporate tax cuts might also help, it suggested. A number of Japanese senior officials have urged that Tokyo reduce corporate taxes, which at over 35 percent are among the highest among leading industrial nations. However, fewer than a third of all companies actually pay such taxes, which means such measures may do little to encourage investment.