Japanese economy accelerates in third quarter

The Japanese economy did surprisingly well in the third quarter of 2010.

The Cabinet Office reported today that real Japanese gross domestic product grew 0.9 percent in the third quarter, faster than the 0.4 percent growth in the second quarter as well as the 0.6 percent growth estimated by economists surveyed by Bloomberg.

This means that the Japanese economy was the best performer among the largest developed economies in the third quarter, at least according to the latest available official estimates.

Percentage change in real GDP
	2009	2010
	Q4	Q1	Q2	Q3
United States	1.2	0.9	0.4	0.5
Japan	1.0	1.6	0.4	0.9
Germany	0.3	0.6	2.3	0.7
France	0.6	0.2	0.7	0.4
United Kingdom	0.4	0.4	1.2	0.8
Italy	-0.1	0.4	0.5	0.2

The third quarter was the first time since the start of the recovery that net exports did not contribute to Japanese economic growth. Exports grew 2.4 percent but this was offset by imports that grew 2.7 percent.

Instead, a 1.2 percent jump in household consumption provided the bulk of GDP growth in the third quarter.

While the third quarter growth maintains Japan's economic recovery, real GDP remained substantially below the peak reached in the first quarter of 2008 though.

Already, however, the Bank of Japan has warned that the economic recovery is "pausing" (see "BoJ says Japanese recovery pausing").

Despite the growth of the past few quarters, a full recovery of the Japanese economy does not look like a near-term prospect.