Japan’s economy grows briskly despite credit woes

TOKYO, May 16, 2008 (AFP) – Japan’s economy grew at a faster than expected 3.3 percent annualised pace in the first quarter of 2008 despite a global credit crunch and US economic slowdown, official figures showed Friday. The world’s second-largest economy remained in sound health as robust exports to China and other emerging markets offset weaker demand in the United States for Japanese cars and other goods.

A rebound in housing investment and rising consumer spending also helped to ensure a third consecutive quarter of positive growth for Asia’s biggest economy, which is gradually recovering from recession in the 1990s.

Analysts noted, however, that consumer spending had been helped by the fact that 2008 is a leap year, giving shoppers an extra day in February.

“I’m concerned about a future slowdown in the economy. I think that one of the major reasons for the strong growth in the first quarter was the leap year,” said Mamoru Yamazaki, chief economist for RBS Securities in Tokyo.

“It will not be a surprise if the second-quarter GDP becomes negative,” he warned.

Gross domestic product (GDP) grew by 0.8 percent in the three months to March from the previous quarter, the Cabinet Office es