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Japan Emerges From Recession - 2002-06-07


The Japanese economy has emerged from recession, posting its best economic growth figures in two years. The news comes as Japanese Prime Minister Junichiro Koizumi meets with finance officials to assess the nation's economic health.

A flurry of consumer spending and a jump in exports pushed Japan's gross domestic product 1.4 percent higher in the first quarter of this year. GDP is the broadest measure of the economy.

The expansion, which exceeded most forecasts, translates into an annualized growth rate of 5.7 percent. That is the fastest since the first quarter of 2000 and is even stronger than the United States' growth rate of 5.6 percent for the same period.

But economists warn that the latest figures may not give an accurate overall picture of the world's second largest economy, which has been battling a slowdown for more than a decade.

Even government ministers are not promising that these figures indicate a turnaround. Heizo Takenaka, State Minister for Economic and Fiscal Policy, says that the growth figures were close to his expectations but notes that economic condition remain severe.

Another official, Takeo Hiranuma, Japan's trade and industry minister, says that it is too early to stop worrying and that officials need to continue to closely monitor the economy.

Economists point out that while Japan may be coming out of its deepest recession since World War II, structural problems remain, including high unemployment and a banking system burdened with huge bad debts.

For the next fiscal year, Tokyo forecasts zero growth, but some economists say even that is impossible unless consumer spending and exports to the United States remain strong.

The administration of Prime Minister Junichiro Koizumi has made economic revival its key aim. He has pledged to clean up the banking sector, privatize some money-losing public entities and limit heavy public works spending, but economists say that progress has been limited.

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