TOKYO (Reuters) - Japan may have emerged late last year from its shortest economic contraction in roughly 60 years, findings of a government panel showed, as optimism generated by Prime Minister Shinzo Abe’s reflationary policies led to robust personal consumption.
Some members of a government panel, charged with gauging Japan’s economic cycle, though the economy may have hit bottom in November last year judging from trends in the coincident indicators’ index, a measurement of current economic conditions.
But the panel decided that more data and evidence would be needed before coming to a conclusion, though GDP data released earlier this month showed the economy expanded 2.6 percent on an annualized basis in the second quarter of this year, slowing from 3.8 percent growth in the first quarter.
“If November were to be the bottom, that would make it quite a short period of contraction,” Hiroshi Yoshikawa, the panel’s chairman and a professor of the University of Tokyo’s graduate school, told a news conference after the meeting on Wednesday.
“When you look at GDP since the fourth quarter of 2012, personal consumption has made a big contribution to growth.”
Some panel members noted that the current economic recovery was a rare case of personal consumption, rather than exports, driving growth, Yoshikawa added.
The panel also agreed that Japan’s economy peaked in April last year to end a three-year expansion that pulled it out from the aftermath of Lehman Brothers’ collapse.
During that time the economy also withstood the pain of a devastating earthquake in 2011.
Exports and a pick up in personal consumption were at the forefront of the economy’s sixth longest postwar expansion as it rebounded sharply from the slump brought about by Lehman’s failure.
The panel, consisted of private-sector economists and academics, meets regularly to determine the peak and bottom of Japan’s economic cycle. It takes into account various data such as GDP and the coincident indicators’ index.
Reporting by Leika Kihara; Editing by Simon Cameron-Moore