apan on Wednesday raised its reading for economic growth in the first quarter, driven up by a stronger-than-expected increase in capital investment. But economists warned the world's No. 2 economy could slow to a standstill later this year.
Japan's gross domestic product, or the total value of the nation's goods and services, in the January-March period grew at an annual pace of 4.0 percent, up from an initial estimate of 3.3 percent. From the previous quarter, GDP grew 1.0 percent, better than the 0.8 percent first announced, the Cabinet Office said.
Business investment in factories and equipment increased 0.2 percent from the previous quarter, much better than a preliminary reading of a 0.9 decline.
Despite the more robust figures, economists warned that global economic uncertainties and rising commodities prices could bring a halt to Japan's six-year economic expansion.
They said unusually brisk personal consumption and exports bloated first-quarter figures, and that coming quarters will be much weaker.
Takehiro Sato, chief economist for Morgan Stanley in Tokyo, called the January-March period an "outlier" and predicts "virtually zero growth" ahead in Japan.
He pointed to rising energy costs Ñ oil prices hit a record high near $140 per barrel last week Ñ as the biggest risk facing the country. That could hurt production costs and erode consumer demand for Japan's vital exports of autos and electronics.
So far, declines in demand from the U.S. have been offset by still healthy exports to emerging markets such as Russia and China.
"If oil prices remain at this level, I'm pretty concerned about demand sustainability in Asia," Sato said.
In the latest GDP data, the Cabinet Office downgraded exports in the first quarter to a 4.0 percent rise from 4.5 percent.
Other data released Wednesday exacerbated concerns.
Japan's current account surplus, the broadest barometer of trade, contracted 29.6 percent in April Ñ the steepest fall in more than five years, according to the Ministry of Finance.
For the fiscal year ended March, Japan's economy grew 1.6 percent, a tad better than the 1.5 percent it first reported.