Information Bulletin No.9

Economy Grows by 0.1%
in First Quarter of 1995

June 23, 1995

Japan's gross domestic product in the January-March quarter of 1995 grew by slightly less than 0.1% in real terms over the preceding quarter, or an annual rate of 0.3%, according to preliminary statistics released by the Economic Planning Agency.

The figure is an improvement over the contraction registered in the fourth quarter of 1994 but is still nearly flat. As a result, real GDP growth for fiscal 1994 (April 1994 to March 1995) was 0.6%, the third year in a row that the growth rate failed to reach 1%.

Nominal GDP growth for fiscal 1994, meanwhile, was 0.3%, the first time that the nominal rate fell short of the real rate since fiscal 1987, when the rapid appreciation of the yen sparked a recession. The main factor, again, was the rise in the value of the yen, which made import prices much lower.

EPA officials maintained that the nation's economy as a whole was still headed for a moderate recovery, although they admitted that the steep rise of yen had adverse effects on some aspects of economic activity.

Factors behind the return to positive growth was the 1.5% quarterly growth in private housing investment and the 0.6% growth in private capital spending. However, personal consumption, a pivotal factor in domestic demand, increased by just 0.1%.

Economic Growth Rates
(%)

Fiscal
Year
1994 1994 1995

II III IV I

Real GDP 0.6 0.2 0.9 -1.0 0.1

Personal
consumption 1.7 -0.3 1.1 -0.6 0.1

Private
housing
investment 8.9 7.9 2.6 -5.4 1.5

Private plant
and equipment
investment -6.3 -2.1 0.3 0.1 0.6

Increase
in private
inventories 2.0 44.1 -17.9 -12.7 36.6

Government
consumption 3.1 0.0 1.5 0.1 2.2

Government
investment 2.4 1.4 0.7 -0.9 -3.2

Increase
in public
inventories - 52.2 10.6 46.2 -51.3

Net exports of
goods and
services -51.1 6.7 -23.5 -66.1 -19.1

Exports of
goods and
services 6.6 3.4 0.5 2.4 -0.0

Imports of
goods and
services 9.4 3.2 1.4 4.4 0.2

	Fiscal Year 1994	1994	1995
	II	III	IV	I
Real GDP	0.6	0.2	0.9	-1.0	0.1
Personal consumption	1.7	-0.3	1.1	-0.6	0.1
Private housing investment	8.9	7.9	2.6	-5.4	1.5
Private plant and equipment investment	-6.3	-2.1	0.3	0.1	0.6
Increase in private inventories	2.0	44.1	-17.9	-12.7	36.6
Government consumption	3.1	0.0	1.5	0.1	2.2
Government investment	2.4	1.4	0.7	-0.9	-3.2
Increase in public inventories	-	52.2	10.6	46.2	-51.3
Net exports of goods and services	-51.1	6.7	-23.5	-66.1	-19.1
Exports of goods and services	6.6	3.4	0.5	2.4	-0.0
Imports of goods and services	9.4	3.2	1.4	4.4	0.2

(The above article, edited by Japan Echo Inc., is based on domestic Japanese news sources. It is offered for reference purposes and does not necessarily represent the policy or views of the Japanese Government.)

Economy Grows by 0.1% in First Quarter of 1995

Economy Grows by 0.1%
in First Quarter of 1995