Tokyo, March 12 (BridgeNews) - Japan's economy rebounded to register growth of 0.8% from October to December staving off another recession, but the government said Monday it fears a slowing down lies ahead. The gross domestic product rose 0.8% from the preceding quarter in October-December.
That would be an annualized 3.2%, after the econom6y declined 0.6% in the previous three months, the Cabinet's Economic and Social Research Institute said.
And it was highly possible the government could meet its forecast of a 1.2% GDP growth rate in the 2000 financial year, which finishes at the end of March, said Taro Aso, Minister of State for Economic and Fiscal Policy. His view is, however, not shared by all private economists.
Aso said, however, it was less certain whether the GDP, the broadest measure of the output of goods and services, could meet the government's forecast of a 1.7% rise in the 2001 fiscal year.
"Sluggish private consumption is the most problematic factor, although the 0.8% gain in the October-December real GDP was stronger than my expectation," said Aso.
"I cannot be optimistic about capital spending in the future," due to the recent weakening of machinery orders data, which is believed to lead capital spending by two to three quarters, noted Aso. Economists said that although data beat government expectations a tough immediate period lay ahead.
"The GDP data was a bit stronger than market consensus. But given the weakness in January industrial output and machinery orders, market players didn't react much to the GDP data," said Harushige Kobayashi, strategist at Meiko National Securities Co.
He noted that the GDP data showed economic conditions only from October to December.
"The stock market reacted more to Friday's Nasdaq fall than the GDP," noted Kobayashi.
Japanese shares ended Monday morning sharply lower as Friday's weak performance on Wall Street dampened issues across the board.
The market showed little reaction to the government emergency economic stimulus package unveiled Friday and slightly stronger-than-expected GDP data as the Nikkei 225 Stock Average plunged 378 points, or 3%, to 12,249.45.