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Japan’s economy grows at 1.7 percent annual pace in Jan-Mar

In this May 16, 2016 photo, shoppers choose clothes at Ameyoko shopping district in Tokyo. Japan reports its economy grew at a better than expected 1.7 percent annual pace in March, as higher government outlays helped offset weakness in business investment and exports. The Cabinet Office reported Wednesday, May 18 that the quarterly pace of GDP growth for the world's third-largest economy was 0.4 percent. (AP Photo/Shizuo Kambayashi)
In this May 16, 2016 photo, shoppers choose clothes at Ameyoko shopping district in Tokyo. Japan reports its economy grew at a better than expected 1.7 percent annual pace in March, as higher government outlays helped offset weakness in business investment and exports. The Cabinet Office reported Wednesday, May 18 that the quarterly pace of GDP growth for the world's third-largest economy was 0.4 percent. (AP Photo/Shizuo Kambayashi) In this May 16, 2016 photo, shoppers choose clothes at Ameyoko shopping district in Tokyo. Japan reports its economy grew at a better than expected 1.7 percent annual pace in March, as higher government outlays helped offset weakness in business investment and exports. The Cabinet Office reported Wednesday, May 18 that the quarterly pace of GDP growth for the world's third-largest economy was 0.4 percent. (AP Photo/Shizuo Kambayashi)

By Associated Press 1 min read

TOKYO (AP) – Japan’s economy grew at a better than expected 1.7 percent annual pace in March, as higher government outlays helped offset relatively weak business investment and exports.

The Cabinet Office reported Wednesday that the quarterly pace of GDP growth for the world’s third-largest economy was 0.4 percent.

Most economists had forecast that growth would be flat at best.

Private consumption, which accounts for Japan’s largest share of growth, rose by an anemic 0.5 percent, while public demand expanded by 2.6 percent. Business investment and spending on housing declined.

Despite the upbeat first quarter figures, recent weak data have raised expectations that Prime Minister Shinzo Abe may put off a planned sales tax increase due in April 2017 to prevent further disruptions, given the faltering progress toward a sustained recovery.