By Roland Buerk
BBC News, Tokyo
**Japan’s economy grew by a better than expected 1.1% in the final quarter of last year, according to government figures.**This is the equivalent of an annualised increase of 4.6%.
But despite the growth in October to December, the economy contracted by 5% over the whole of 2009.
The figures mean Japan remains the world’s second biggest economy, although China is drawing level and is expected to overtake soon.
Japan’s gross domestic product figures for 2009 were keenly anticipated by economists, looking for the moment when China overtakes.
China lags
Better than expected growth in the final quarter of last year means Japan remains ahead.
But China is drawing level and its economy is expanding far more quickly.
Figures from Japan’s government showed that gross domestic product, the value of the nation’s goods and services, went up by 1.1% in October to December.
But at the start of the year Japan was in its steepest recession since the end of World War II, so over 2009 as a whole the economy contracted by 5%.
Japan’s return to growth has been led by exports, particularly to China which is now its largest overseas market.
At home, wages and prices are falling.
Consumer spending remains relatively weak - propped up by government stimulus measures.