Tokyo, Aug 13: Japan's economy grew a stronger-than-expected 0.6% in April-June from the previous quarter, as Sars fears restrained travel and helped boost spending at home, the Cabinet Office said. On an annual basis, real gross domestic product expanded 2.3% in the world’s second-largest economy on the quarter. It was the sixth straight quarter of growth.

“This is a little bit higher than I expected,” said Heizo Takenaka, the minister in charge of economic policy. “The economy is gradually moving to a different plane.”
The figure compared with a revised 0.3% growth for January-March and exceeded the consensus estimate among private economists for an increase of 0.2% in April-June from the previous quarter.

Private consumption, which accounts for almost 60% of GDP, grew 0.3% in the period. “We believe demand for televisions, DVD players and digital cameras contributed” to growth, said a cabinet office official.
The SARS outbreak appears to have helped domestic consumption, as people cancelled plans for travel abroad and spent their money at home instead. “Within household spending, recreational spending rose so it might be because people cancelled their trips abroad,” the official said. Bureau Report