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Last updated: May 14. 2014 10:35PM - 382 Views
Associated Press



In this Wednesday, May 14, 2014 photo, people walk along a pedestrian crossing in Tokyo. Preliminary data show Japan's economy grew at a 5.9 percent annualized rate in the January-March quarter as companies and consumers stepped up buying ahead of an increase in the sales tax. The growth figures for the world's third-largest economy released Thursday, May 15 were in line with expectations a pre-tax hike rush. (AP Photo/Shizuo Kambayashi)
In this Wednesday, May 14, 2014 photo, people walk along a pedestrian crossing in Tokyo. Preliminary data show Japan's economy grew at a 5.9 percent annualized rate in the January-March quarter as companies and consumers stepped up buying ahead of an increase in the sales tax. The growth figures for the world's third-largest economy released Thursday, May 15 were in line with expectations a pre-tax hike rush. (AP Photo/Shizuo Kambayashi)
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(AP) Japan's economy grew at a 5.9 percent annual rate in the January-March quarter the fastest rate in nearly three years as companies and consumers stepped up buying ahead of an increase in the sales tax that is expected to cause a contraction in the current quarter.


The growth figures for the world's third-largest economy released Thursday were in line with expectations a pre-tax hike rush. Strong private consumption, residential investment and corporate spending were the biggest contributors to growth, while public spending fell slightly.


Quarter-to-quarter growth, adjusted for inflation, was 1.5 percent, the fastest rate since the rebound from the March 2011 earthquake and tsunami. It was the sixth straight quarter of expansion.


Japan raised its sales tax to 8 percent from 5 percent on April 1, and economists expect that change to cause a contraction in the current quarter. But the latest data suggest growth may be buoyant enough to rebound relatively quickly.


Since taking office in late 2012, Prime Minister Shinzo Abe has sought to get growth back on track through a combination of heavy government spending, ultra-loose monetary policy and economic reforms.


Although the economy was already recovering when Abe took office, his "Abenomics" formula is credited with boosting corporate profits and helping Japan escape from a longtime deflationary rut, moving toward a 2 percent official inflation target as prices rise thanks to the flood of money in the economy and higher costs for imports due to a weakening in the Japanese yen.


Abe is due to present in June his latest explanation of his reform plans, which so far have made little headway.


Associated Press
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