Japan’s 3.7 % economic expansion last Q ended the country’s worst postwar recession. The bounce may be as good as it gets.

Growth will low to an annual 2.9 % pace in the three months ending Sept. 30, according to the median forecast of 10 economists surveyed after yesterday’s gross domestic product report. Falling business investment and rising unemployment may hamper a recovery that has been fueled by $2.2 trillion in emergency spending by governments worldwide.

 “We have our doubts about the durability of this,” said Robert Feldman, head of economic research at Morgan Stanley in Tokyo. “There’s isn’t enough demand to get us back on a very strong recovery path. We don’t see a huge downside, but nevertheless the upside is pretty limited.”

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