Japan cuts third-quarter growth estimate

Chief Regulatory Officer at CSE Renuke Wijayawardhane presenting the listing certificate to Executive Chairperson at Renuka Hotels Shibani Thambiayah

TOKYO, Dec 7, 2007 (AFP) – Japan’s economy grew at an annualised pace of 1.5 percent in the third quarter of 2007, much less than an initial estimate of a 2.6 percent expansion, the government said Friday.

But the world’s second-largest economy saw a recovery after shrinking in the second quarter, buoyed by brisk exports to Asia.

Japan’s gross domestic product (GDP) grew by 0.4 percent in the three months to September from the previous quarter, below an earlier estimate of 0.6 percent, the Cabinet Office reported.

Growth was hit by weaker-than-expected capital investment by companies in new equipment and factories, it said.

But analysts said Japan should continue its slow recovery from a slump stretching back over a decade.

“The latest growth data doesn’t negatively change the outlook for Japan’s economic recovery,” said Takehide Kiuchi, an economist at Nomura Research Institute. Japan’s recovery stalled in the second quarter of the year, when GDP shrank as firms cut spending on new factories and equipment.