Economic revival continues in Japan
Japan's GDP (Gross Domestic Product) grew by 1.4% in the first three months of 2004, according to the statement made by Japanese government. On an annualized basis, the world's second biggest economy expanded 5.6%. The January-March GDP grew faster than expected as private consumption showed much stronger than expected growth. Private consumption, which accounts for about 55% of GDP, rose by 1%, driven by strong sales of digital appliances and automobiles. In the first quarter, domestic demand also surged by 1.1% from the previous quarter while net exports were up by 0.3%. These data show that consumer spending has finally increased. However, economists were divided opinion whether domestic consumption will continue expanding or not as deflation still remains as a problem. Furthermore, if US interest rates rise, there may be a slowdown in demand for Japanese exports.