DHAKA: Japan’s economy has dodged a recession after it grew faster than expected in the first three months of the year.

Gross domestic product in the world's third-largest economy grew at an annualized pace of 1.7%.

The better-than-expected growth rate came after higher government spending helped to offset weakness in business investment and exports.

It marks a rebound from the previous quarter but is not thought to lessen the pressure for more economic reform.

Japan’s economy had shrunk in the final three months of 2015, so the expansion in the first quarter meant it avoided falling into recession - usually defined as two successive quarters of contraction.

The past four quarters have been volatile, alternating between growth and contraction.

In January, the Bank of Japan introduced negative interest rates in an attempt to stimulate the economy.

“One of the lessons over the past year is that monetary policy isn’t as effective as it was in the past and might have reached some limits,” Martin Schulz from Fujitsu Research Institute told the BBC.

“So what we will probably see this year is that the Bank of Japan will keep buying government bonds and the government will probably start to spend even more than it did before to support the economy.”

Analysts remain concerned about the outlook for consumer spending, which accounts for about 60% of economic growth.

The surprisingly strong economic growth between January to March was partly attributed to an extra day because of 2017 being a leap year.

BDST: 1331 HRS, MAY 19, 2016
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