Japan's economic growth revised upward to 4.5% in Q3

Japan's economy grew an annualized real 4.5 percent in the July-September quarter, marking the fourth consecutive quarter of expansion and beating economists' forecasts, the Cabinet Office said Thursday in a finalized report, which saw the figure upwardly revised from a 3.9 percent growth.

The July-quarter expansion exceeded median economists' forecasts for 4.1 percent growth and a notable increase in capital spending contributed to the growth, the Cabinet Office said.

As measured by GDP (gross domestic product) this corresponds to 1.1 percent from the previous quarter, from a preliminary reading of 0.9 in the recording period, the government data showed.

Private consumption, which accounts for about 60 percent of GDP, contributed to the expansion as consumers rushed to buy eco- efficient cars, homes and consumer technology ties ahead of the expiration of a government 'green' subsidy and points program, the Cabinet Office said.

Analysts still maintain the pace of the economic growth is likely to slow sharply, or possibly reverse its growth trend in the final quarter of this year, as weakening overseas demand, deflation, waning domestic demand and a strong yen are likely to take their toll on growth.

"The third quarter could be the peak of the expansion and Japan may go into a mini-economic stagnation this quarter," said Seiji Adachi, a senior economist at Deutsche Securities Inc.

"Corporate earnings may deteriorate as the boost from the government's stimulus steps is waning and the global economy is slowing," he said.

Following the latest poll of 42 economists and research institutions conducted by the Cabinet Office's Economic Planning Association (COEPA), economists have revised down their forecasts for Japan's economic growth for this fiscal year and fiscal 2011 while projecting prices in fiscal 2011 and 2012 may not rise as much as expected earlier.

GDP is the total value of goods and services produced domestically. Real GDP data are adjusted for price and seasonal variations.

Source:Xinhua