Japan's economy grew at its fastest pace in a year in the first quarter of 2005, more than double the rate expected as robust private consumption and corporate investment more than made up for weak export growth.
Most economists said the strong recovery momentum was unlikely to last, however, and that a possible slowdown in China and a prolonged slump in high-tech industries clouded the outlook for the world's second-biggest economy.
Gross domestic product expanded 1.3% in January-March from the previous quarter and 5.3% on an annualised basis in real price-adjusted terms, government data showed today. The figures far exceeded market expectations for 0.6% growth from the preceding quarter or an annualised 2.2%.
The January-March expansion, which followed barely perceptible growth in October-December, compared with annualised growth of 3.1% in the US and 1.4% in the euro zone in the first quarter of the year.
Private-sector consumption rose 1.2%, compared with a consensus forecast for a 1% gain, supported by an improvement in the jobs market and wages over the past year.
Japan's unemployment rate was 4.5% in March compared with 4.7% a year earlier. Winter bonuses were up 2.7% from a year before, for the first rise in eight years.
But many economists said the rise in GDP was mostly due to a sharp fall in the previous quarter, blamed on typhoons and snowstorms.
