Country’s economy rises 5.3%

Tuesday, May 17, 2005 | 9:05 a.m.

Japan's economy grew at a 5.3 percent annual pace in the first quarter, twice as fast as economists forecast, as rising wages prompted consumers to boost spending. Stocks gained and bonds fell.

The world's second-largest economy accelerated from a revised 0.1 percent pace in the fourth quarter, a report by the Cabinet Office in Tokyo showed today. The median forecast of 28 economists surveyed by Bloomberg was for gross domestic product to expand 2.4 percent.

"The economy is on a broad recovery trend," Economic and Fiscal Policy Minister Heizo Takenaka told reporters in Tokyo.

Consumer spending at retailers including Aeon Co. and Matsuzakaya Co. accounted for more than half of the expansion, helping sustain a recovery from last year's recession. Japan's government needs to sustain growth to end seven years of deflation and cut the world's largest government debt.

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