Japan’s 4th-Quarter Growth Overestimated

Japan’s economy expanded less than estimated in the fourth quarter of last year because the contribution from business spending was lowered, government figures showed. The economy grew 0.7% in the three months ended Dec. 31 from the third quarter, seasonally adjusted, less than the initial estimate of 0.8%, the government’s Economic and Social Research Institute said. The slower growth highlights the challenges incoming Prime Minister Junichiro Koizumi faces in turning around the economy. Koizumi, who Monday was chosen to lead the ruling Liberal Democratic Party, said a one- to two-year recession may be unavoidable if Japan is to undergo the changes needed to fix the economy. Falling overseas demand has prompted manufacturers to curtail production and put expansion plans on hold. That has led the government and the Bank of Japan to give their bleakest economic assessments in more than five years. Capital spending rose 6.7% in the fourth quarter, the report said, revised from an initial estimate of 6.8%. That was the only change.