Economy World

Japan: a temporary increase in the economy

TOKYO – Japan’s economy has surged six per cent over the last quarter, posting a rise in the aftermath of the earthquake and tsunami of March, according to data released Monday.

Experts warn, however, that this increase should not go on forever, while the euro area is plunged into a crisis of sovereign debt.

On Monday the government published its report on gross domestic product (GDP), which is reported a growth in the first four quarters for Japan, the third world economy.

The earthquake of March 11 and the tsunami that followed resulted in the deaths of thousands of people and devastated entire regions of the northeast coast of Japan. Natural disasters damaged several factories, at the same time causing a major shortage of parts for various manufacturers across the country, including auto manufacturers.

The tsunami also damaged nuclear power plant in Fukushima, further exacerbating the situation for companies and households in Japan.

Japan has since launched the reconstruction operations, which helped to stimulate the economy despite threats of a financial crisis in Europe, slowing global economy and strong yen.

Tokyo reported that the annual figures were equivalent to a GDP growth of 1.5 percent the previous quarter. GDP measures the value of goods and services produced within a country.

Consumer spending, which accounts for some 60 percent of the economy, rose by one percent since the last quarter. Capital investment companies have meanwhile increased by 1.1 percent. These solid figures for the third quarter however, should not continue, analysts have warned.

Credit Suisse economist, Hiromichi Shirakawa said that Japan had enjoyed a marked increase in exports and industrial production in early summer.

He added that the Japanese economy is expected to weaken in the coming months and a decline in GDP for the fourth quarter.

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