The Japanese economy grew at its fastest pace in more than two years between July and September as government stimulus programmes meant consumers hit the shops and capital spending rose.
The country’s trade minister, Masayuki Naoshima, managed to get himself in trouble by accidentally revealing that information while giving a speech nearly an hour before it was officially released. He was severely reprimanded for the slip. In the third quarter, Japan’s economy grew 1.2 percent from the previous three months, better than the US and Europe. But analysts have predicted that that pace of growth will not continue, partly due to sluggish personal spending by the Japanese. Shinzo Maeda, the head of Shiseido, Japan’s biggest cosmetics company, echoed the government’s fears about growth. He said: “The domestic market continues to see a challenging environment. Japan’s GDP has grown from the previous quarter. So, we may be able to say the economic situation is settling down, but I don’t think consumer sentiment has improved.” The better-than-expected headline GDP growth figure failed to mask signs of weakness in domestic private consumption and factory output. Japan’s exports are holding steady, but the government is planning further stimulus measures. However the country’s massive national debt means it does not have the leeway to spend as much as economists say it needed.