Japan GDP revised up to 3.8% growth

Japan's economy grew faster than initially estimated in the April-June period thanks to stronger private and public investment, the government said Monday. The world's No. 3 economy's gross domestic product (GDP) expanded at an annual 3.8 percent pace in the second quarter, much higher than a preliminary figure of 2.6 percent released last month, according to the Cabinet Office. The GDP also marked the third straight quarter of growth. On a quarterly basis, GDP grew 0.9 percent in the three months ended June 30 from the previous quarter, revising upward an initial reading of 0.6 percent rise. Corporate capital spending, a key pillar of domestic demand, was revised upward to a 1.3 percent expansion from a 0.1 percent decline in the preliminary data, marking the first growth in six quarters. The data also shows a 3 percent growth in public investment, compared to the earlier estimate of a 1.8 percent expansion. GDP is the total value of goods and services produced domestically. Monday's strong GDP revision is likely to help Prime Minister Shinzo Abes government proceed with a planned sales tax hike in April. "The growth figure offers another favorable condition for the sales tax hike," Economic and Fiscal Policy Minister Akira Amari told reporters. The government proposed to raise the consumption tax from the current 5 percent to 8 percent next April, and to 10 percent in October 2015 to restore the country's fiscal health, with its public debt reaching more than 200 percent of GDP. Abe has said he will make a final decision by early October on whether to go ahead with the April tax hike after examining the results of the Bank of Japan's quarterly business sentiment survey due out October 1. Abe, who took office last December, has promoted his ambitious economic policies called "Abenomics" platform to boost Japan's economy and to overcome the deflation that has lasted for nearly 15 years.