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TOKYO (MNI) – Economists expect slower near-term growth in Japan’s
consumer prices in the face of lower energy costs but have revised up
their GDP forecasts for the coming two years, the latest monthly survey
by the Japan Center for Economic Research released on Tuesday showed.

The association polled 40 economists and research institutes from
June 26 to July 3 for its ESP Forecast Survey, and 40 answered on the
growth and inflation outlook and 36 on the BOJ’s monetary policy stance.

The previous survey was conducted from May 25 to June 1.

In the near term, economists expect GDP for the April-June quarter
of 2012 to post an annualized gain of a real 1.87%, a slight downward
revision from their previous average forecast for a 1.89% rise.

Amid global economic and financial uncertainties, the average GDP
forecast for the July-September quarter was also revised down further to
+1.52% from +1.88% in the previous survey.

But for fiscal 2012 ending March 31, 2013, economists on average
forecast GDP will grow 2.32%, revised up further from +2.27% forecast in
the previous survey.

Economists on average project a 1.59% rise in GDP in fiscal 2013,
revised up from +1.50% projected the previous month.

The survey showed that the average forecast for core CPI (excluding
perishables) in fiscal 2012 was for +0.06%, down from +0.11% in the
previous survey. It would be the first annual increase in four years
since +1.2% in fiscal 2008.

Economists on average expect consumer prices to show a 0.20% rise
in fiscal 2013, unchanged from the previous month.

The forecasts showed that consumer price rises for the next two
years will remain far below the Bank of Japan’s longer-term goal of
achieving 1% annual inflation.

The survey also showed that 25 economists predict further monetary
easing by the Bank of Japan in coming months, mostly in July, down from
29 last month.

Meanwhile, 11 economists expect the BOJ to start unwinding its
monetary easing, mostly in about a year ahead, down from nine in the
previous survey.

tokyo@marketnews.com
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