Japan's economy increased an annualized 5.5 percent in real terms in the fourth quarter of 2005, the Cabinet Office said in a preliminary report on Friday.

The growth from October to December last year marks a 1.4 percent rise in gross domestic product from the previous quarter, it said, higher than average market forecast of 1.2 percent.

For the whole of 2005, GDP, or the total value of goods and services produced domestically, gained 2.8 percent in real terms, marking the sixth straight year of growth.

According to the report, personal spending, which accounts for about 55 percent of Japan's GDP, gained a real 0.8 percent.

Corporate capital spending rose a real 1.7 percent and housing investment expanded a real 1.9 percent. Public investment increased a real 1.7 percent.

Exports grew a real 3.1 percent while imports dropped a real 1. 3 percent.

Domestic demand pushed up GDP by 0.8 percentage point, while external demand raised GDP by 0.6 point.

The GDP deflator, a key price change gauge, dipped 1.6 percent for the 31st consecutive quarterly decline.

Source: Xinhua