Japan's economy expanded at an annual pace of seven percent last quarter, the strongest growth in 13 years. Healthy exports and rising corporate investment are behind the surge.
In the latest indication that Japan's economy is recovering, gross domestic product grew 1.7 percent from October to December 2003. On an annualized basis, that equals full year growth of seven percent.
The quarterly pace, which marks the best showing in more than a decade, was beyond the expectations of economists and government officials, including Economy Minister Heizo Takenaka. He says the figures were better than he had hoped and he pledges to move ahead with structural reforms to encourage more growth.
For all of 2003, the economy grew two-point-seven percent.
Japan has been struggling to achieve stable growth for years, since its economic boom collapsed in the early 1990's. Because of years of falling asset prices and low personal consumption, it has experienced three recessions in a decade, and when it was not in recession, saw very little economic growth.
But now, falling unemployment appears to be encouraging consumer spending. In addition, exports of cars, electronics and other items are robust, especially to the United States and China.
Government spokesman Yasuo Fukuda told reporters Wednesday that companies are increasing their investments - giving another boost to GDP. He says companies are continuing to recover and spend more, in line with government policies.
For instance, camera maker Canon and electronics giant Sharp are opening new plants and production lines, as are many other Japanese companies.
But these companies and other Japanese exporters continue to fret over the strong yen, which has advanced 13 percent against the dollar in the past year. The trend means Japanese exports are more costly, which threatens overseas sales and many economists say it could lead to slower growth in 2004.