The government in Tokyo has substantially revised upwards the Japanese growth figure for the second quarter. Higher economic output in the world’s third largest economy was primarily boosted by government spending.
Between April and June Japan's economy expanded by 3.8 percent compared with the same period a year ago, the Cabinet Office in Tokyo said Monday, as it revised a preliminary estimate of just 2.6 percent.
Compared with the first three months of 2013, economic growth was 0.9 percent higher in the second quarter, it added.
Japanese growth data showed a higher-than-expected rise in public investment, which jumped 3 percent. Private-sector and non-residential investments also recorded slight increases.
The growth revision, however, showed actually lower-than-expected consumer spending. Data on exports and imports remained unchanged.
The stronger growth domestic product (GDP) in the second quarter supports plans by the government to increase the country's sales tax from currently 5 percent to 10 percent.
Prime Minister Shinzo Abe said the GDP figure was one of the key indicators in deciding whether to go ahead with the VAT hike. Abe has made extensive efforts to overcome decades of stagnation in the world's third-biggest economy, boosting government spending and weakening the yen. Once the economic recovery takes hold, Abe will seek to use the VAT hike to rein in the huge government debt.
uhe/tj (dpa, AP)