The economy grew an annualized real 4.6 percent in the October-December quarter for the third consecutive quarter of expansion as corporate capital investment revived amid a recovery in exports while consumer spending continued to perk up on stimulus measures, the government said Feb. 15.

The Cabinet Office also said nominal GDP stood at $5.08 trillion in 2009, narrowly surpassing that of China's $4.91 trillion. However, the data suggest the Japanese economy will be surpassed by China's in the near future, possibly this year, it said.

The expansion marked in the three-month period corresponds to a 1.1 percent rise from the July-September quarter, the Cabinet Office said. It compares with a revised 0.01 percent gain in the previous quarter.

"Fears of the nation's economy falling into a double-dip recession have faded a little," Finance Minister Naoto Kan said.

But Kan, also the state minister for economic and fiscal policy, warned against complacency, saying employment and overseas economic conditions are still uncertain.

The October-December figures beat the average market forecasts of an annualized 3.5 percent increase and 0.9 percent quarterly growth.

The pace of the economic recovery accelerated as domestic demand contributed to GDP growth for the first time in seven quarters on pickups in consumer spending, and corporate investment in plant and equipment.

Despite the stronger growth in the quarter, the economy for all of 2009 logged a 5.0 percent decline from the previous year, the largest contraction since the government began compiling comparable data in 1955.