By YURI KAGEYAMA, Associated Press
TOKYO (AP) — Japan's economy grew at an annual rate of 4.1 percent for January-March amid a gradual recovery from the catastrophic earthquake and tsunami of the previous year.
The Cabinet Office said Thursday the preliminary data for the gross domestic product, or the measure of a nation's goods and services, showed a rebound in consumer spending that was lifting the economy.
After the March 11 disaster last year, many Japanese were in mourning and stayed away from stores, theaters and pubs.
That hurt an already hobbled economy badly hit by the disaster in northeastern Japan, which disrupted supply chains and ground manufacturing plants to a halt.
But the latest data showed that private consumption grew at an annual rate of 4.4 percent. Consumer spending makes up more than half of Japan's economy.
"The numbers show a solid Japanese economic recovery," said Satoshi Osanai, economist at Daiwa Institute of Research in Tokyo.
Consumer spending got a huge lift from government subsidies for ecological vehicles that sent buyers to dealerships for hybrids and other fuel-efficient models.
But prospects remained uncertain for this quarter because of fears about the European economy and other factors that could crimp expansion.
"Economic growth is likely to slow down and could head into a contraction," said Osanai.
Also robust was public investment at 23.6 percent, reflecting reconstruction spending in housing and other building in the devastated northeastern region.
Japan's economy grew 1.0 percent in the quarter ended March from the October-December 2011 quarter.
That was better than the 0.7 percent on-quarter growth that was projected by analysts in Japan, and translates to a 4.1 percent expansion in annual terms.
The latest growth marks a third straight quarter of growth, although still at fragile rates. The economy was virtually flat October-December but did not shrink.
Corporate spending was weak during the January-March period, shrinking 3.9 percent from the previous quarter, or an annualized rate of 14.8 percent.
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