Japan's gross domestic product contracted by 0.1 per cent in the October-December period, driving the world's second- largest economy back into recession, the government said Wednesday. Despite the dismal economic figures, Japan's economic minister Heizo Takenaka said the Japanese economy is on a recovery track from a broad perspective. "The Japanese economy has been flat somewhat for a long period of time, but there is no need to change the basic view that the economy is somewhere between levelling off and slightly weakening," Takenaka said at a press conference Wednesday in Tokyo. He added that there is no change in the government's projection that the Japanese economy will start picking up again in the middle of 2005. The fourth-quarter results marked the third consecutive quarter of contraction. The annualized rate translated into a contraction of 0.5 per cent. The figure was worse than economist expectations of a 0.1 per cent rise for the quarter. The economy's disappointing performance for the period was partly due to a 0.3 per cent quarterly fall in personal spending, which accounts for more than half of Japan's GDP. Exports expanded 1.3 per cent in real terms, a slow rate for Japan's export-driven economy. Exports also fuelled industrial output and capital spending. Imports, meanwhile, rose a real 3.1 per cent. Corporate capital spending was up a real 0.7 per cent, according to the government. The economy grew for a second year in a row in 2004 - 2.6 per cent in real terms, the fastest pace since 1996. Japan's annual growth rate compares with predictions of 4.4-per- cent growth in the United States and 2-per-cent growth in the European Union. GDP is the total value of goods and services produced domestically. Real GDP is adjusted for inflation and seasonal variations.
