Japan's economy in the second quarter of this year, April through June, expanded slightly at an annualized rate of 0.9 percent. This is a far cry from the 8.1 percent surge in the first quarter. But two consecutive quarters of positive growth make it reasonably clear that the protracted economic slump has bottomed out.
A caveat is in order, however. The growth of gross domestic product in the first half of 1999 is due primarily to policy measures, such as increased public-works spending, personal income-tax cuts, tax breaks for home purchases and rock-bottom interest rates. There are as yet no solid signs of a self-propelled recovery fueled by the robust expansion of private-sector demand. To achieve that, it may be necessary to implement further stimulus measures.
Many economists had predicted that second-quarter GDP would drop slightly in reaction to heady first-quarter growth. That they have been proved wrong suggests that the effects of policy measures have been steadily permeating the economy. Now it is almost certain that the government's growth target of 0.5 percent for fiscal 1999 will be achieved.