TOKYO (MNI) – The Japanese government has decided to increase its
forecast for economic growth this fiscal year to 2.6% from its earlier
estimate of 1.4%, the Nikkei financial daily reported Monday.
The near doubling of the economic growth forecast is due mainly to
the continued rise in Japanese exports on the back of expanding growth
in emerging countries.
In addition, capital investment is also leveling off.
The forecast for positive growth is the first in three years.
Japan’s economy expanded a solid 1.2% in real terms in
January-March from the previous quarter, unrevised from the initial
reading released last month and posting the fourth straight quarter of
growth, the Cabinet Office said on June 10.
Revised data confirmed that the current recovery from the global
recession has been underpinned by strong exports to Asia, continued
consumer spending gains and a recovery in business investment.
But for the whole of fiscal 2009, the economy marked the second
largest drop on record in inflation adjusted terms.
Despite the expected stronger economic growth this fiscal year, the
government continues to expect consumer price index to stay in negative
territory.
The government is expected to strengthen its coordination with the
Bank of Japan to overcome deflation.
tokyo@marketnews.com
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