RPT-Japan Q1 GDP rises 1.5 pct q/q, fastest in nearly three years

Wed May 14, 2014 8:10pm EDT

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TOKYO May 15 (Reuters) - Japan's economy grew 1.5 percent in January-March from the previous quarter, posting its biggest expansion since July-September 2011, as consumer spending jumped ahead of an April 1 sales tax increase, government data showed on Thursday.

Capital spending also grew far faster than expected.

The preliminary figure for gross domestic product compared with 1.0 percent growth forecast by economists in a Reuters poll. It followed a revised 0.1 percent rise in the final quarter of last year, Cabinet Office data showed.

The first-quarter GDP figure translated into annualised growth of 5.9 percent, versus 4.2 percent growth expected by economists.

Private consumption, which accounts for about 60 percent of the economy, increased 2.1 percent on the quarter, its fastest growth since January-March 1997. That was in line with a 2.1 percent gain forecast by economists.

Capital spending, seen as key for sustained growth in the world's third-largest economy, grew 4.9 percent, far exceeding a projection for a 2.1 percent rise and marking its biggest gain since October-December 2011.

External demand shaved off 0.3 percentage point from quarterly growth, reflecting Japan's hefty trade deficit as exports remain sluggish and demand for imports of fuel and other goods stays strong.

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To view full tables, click on the Cabinet Office website: here (Reporting by Tetsushi Kajimoto, Stanley White and Leika Kihara; Additional reporting by Chris Gallagher; Editing by Edmund Klamann)

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