Japanese GDP grew at twice the pace of Germany and the UK in first quarter

Peter Spence
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Japanese leader Shinzo Abe has implemented several growth-boosting reforms since taking power (Source: Getty)

Revisions to Japanese growth estimates have seen them move even higher. The Cabinet Office now sees Japan's growth at 1.6 per cent for the first three months of 2014, up from its initial estimate of 1.5 per cent.

Stronger than expected business investment saw growth given the nudge upwards, despite analysts forecasting that revisions would see growth estimates knocked down to 1.4 per cent.

Business investment rose by 7.6 per cent in the first quarter, up from an initial estimate of a 4.9 per cent increase. That jump in business investment is the largest recorded in Japan since the last quarter of 2011.

The second estimate of GDP growth sees Japan remain firmly in first place amongst G7 nations for first quarter growth. Germany takes second spot, followed by the UK, but the gap between second and third is very narrow. They both grew at about 0.8 per cent during the first three months of 2014.

The update confirms Japanese growth at its fastest pace since the third quarter of 2011, although economists at Capital Economics warn of overstating the importance of this second estimate.

Capital Economics' Japan economist, Marcel Thieliant, notes that "revisions between the first and second estimate have historically not brought the data closer to final outcomes."

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