Japan’s economic growth at 5.9 per cent in 1st quarter on rush to buy ahead of sales tax hike

TOKYO – Preliminary data show Japan’s economy grew at a 5.9 per cent annualized rate in the January-March quarter as companies and consumers stepped up buying ahead of an increase in the sales tax.

The growth figures for the world’s third-largest economy released Thursday were in line with expectations a pre-tax hike rush. Strong private consumption, residential investment and corporate spending were the biggest contributors to growth, while public spending fell slightly.

Quarter-to-quarter growth, adjusted for inflation, was 1.5 per cent.

Japan raised its sales tax to 8 per cent from 5 per cent on April 1, and economists expect that change to cause a contraction in the current quarter.

The first quarter expansion was the fastest since the rebound from the March 2011 earthquake and tsunami disasters and the sixth straight quarter of expansion.