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Economic performance -Japan likely to ''beat'' forecasts |
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2004-7-19
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The Bank of Japan announced the world''s second-largest economy forecast a 3.1 percent for the year ending March 31, 2004. It also affirmed its forecast that core consumer prices, which exclude fresh food, will fall 0.2 per cent this fiscal year.
"Japan''s economy is expected to gather strong momentum," the report said. Increasing production, driven by exports and investment, "is exerting positive effects on unemployment."
Japan''s economy expanded at a 6.1 per cent annual pace in the first three months of 2004, the fastest among the Group of Seven industrialized nations. Consumer spending accounted for about a third of that growth.
The government indicated that improving job market was initiating consumer spending.
"We''re definitely seeing an improvement in consumer sentiment, which is helping to loosen purse strings," said Junichi Makino, a senior economist at Daiwa Institute of Research in Tokyo.
Central bank Governor Toshihiko Fukui called on the government to
help the recovery from a third recession since 1991 by curbing spending to reduce public debt, which is approaching 144 per cent of gross domestic product.
Large manufacturers plan to increase capital spending by 20 per cent this fiscal year, the biggest increase in 15 years, the Bank of Japan''s quarterly Tankan survey showed this month. Large manufacturers are defined as having more than 1 billion yen (US$9.17 million) in capital.
Exports and capital spending ‘continue to increase,’ the bank said today. Exports in May rose at their fastest pace since 1995, according to a balance-of-payments report released by the Ministry of Finance on Tuesday, last.
‘Positive movements’ noticed in consumer spending was showing as unemployment fell to 4.6 percent in May, the lowest since August 2000. |
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