Prime Minister Yukio Hatoyama held a "Real Hato Cafe" meeting at the Prime Minister's Office on Sunday, Feb 14, 2010. It is a forum for dialogue, in which guests are invited to the Prime Minister's Office to talk with the PM on daily concerns.

Japan's economy grew at a faster than expected 1.1 per cent pace in the last quarter of 2009 -- an annualised rate of 4.6 per cent  - - compared with the previous three months, boosted by rising exports and domestic demand, according to preliminary data released in Tokyo on Monday. The economy contracted  5.0 per cent in 2009.

The government was criticised last year for big variation in the reports of third quarter GDP (gross domestic product), which initially reported the economy grew a at a 4.8 per cent rate, only to revise the rate down later to 1.3 per cent. The Cabinet Office said today's data are more reliable following a review of the method of compiling national accounts statistics.

In the same period, the US economy grew at a 5.7 per cent rate but the Eurozone economies grew a dismal 0.1 per cent. Today's the data confirmed that Japan remained the world's second largest economy in exchange rate dollars in 2009, with GDP of $5,085 billion compared with China's $4,909 billion, according to Reuters calculations. China's economy is the second largest economy on a purchasing power parity basis.

GDP shrank 1.2 per cent in 2008 and 5.0 per cent in 2009 - - marking the steepest recession since 1945.

In the fourth quarter, net exports accounted for 0.5 percentage points of GDP growth.

Consumer spending, which accounts for about 60 per cent of the economy, rose 0.7 percent from the previous quarter.

Japan may now be strong enough to avoid falling back into recession, said Cabinet official Keisuke Tsumura, according to Kyodo News agency.

Corporate capital spending climbed 1 per cent in the first expansion since January-March 2008. Public investment fell 1.6 per cent.