Gov't mulling declaring economic recovery in next monthly assessment+

TOKYO, June 11 Kyodo -
Japan is considering declaring an economic recovery in its monthly economic
assessment report for June to be released next week, government sources said
Friday, following a set of recent releases of upbeat economic figures.
A government report showed Thursday that Japan's real gross domestic product
for the January to March quarter expanded 5.0 percent on an annualized basis,
slightly faster than the government's original estimate of 4.9 percent growth.
The June report will likely incorporate the phrase ''mild recovery,'' according
to the sources, using ''recovery'' for the first time in 23 months since July
2008 before the failure of Lehman Brothers Holdings Inc.
The upcoming report will state that capital expenditures will move on a firm
tone on the back of exports for the rest of Asia, mainly China, and that
consumer spending, which constitutes the core of domestic demand, will continue
to pick up aided by improvements in employment and income.
But the government will continue to stay wary about calling the recovery
self-sustaining, while keeping unchanged its view that Japan is staying in
deflation, according to the sources.
The government also plans to revise upward its estimate for gross domestic
product expansion for fiscal 2010 to around 2.5 percent in real terms from 1.4
percent expansion estimated last December.
In its monthly report for May, the Cabinet Office said, ''Although the economy
has been picking up steadily, it is only weakly self-sustaining and remains in
a difficult situation'' as seen by the high unemployment rate, maintaining its
assessment for a second straight month after a moderate upgrade in March.
On Thursday, Keisuke Tsumura, a parliamentary secretary at the Cabinet Office,
said, ''The Japanese economy is entering a recovery phase,'' as he briefed
reporters on the revised GDP data.
But economists as well as Tsumura were cautious about declaring that the
recovery has entered a self-sustaining stage, with the recovery in corporate
capital spending remaining slow.
The release of the assessment will come ahead of the planned endorsement at a
Cabinet meeting June 22 of medium-term and long-term fiscal reform policies as
well as a set of growth strategies.
==Kyodo
2010-06-11 23:03:09