ID :
96842
Sat, 12/26/2009 - 00:15
Auther :
Shortlink :
https://www.oananews.org//node/96842
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LEAD: Japan to see 1st growth in 3 yrs in FY 2010, but to remain in deflation+
TOKYO, Dec. 26 Kyodo -
(EDS: RECASTING WITH MORE INFO)
The Japanese government forecast Friday that the nation's economy will grow 1.4
percent in real terms in fiscal 2010, marking the first expansion in three
years on the back of recovering exports and its stimulus measures.
On a nominal basis, the government expects the economy, as measured by gross
domestic product, to grow 0.4 percent in the year starting April, also the
first expansion in three years.
The forecast shows, however, that the nation's economy will remain in deflation
-- a situation in which the unadjusted nominal growth rate is lower than the
inflation-adjusted real growth rate -- as consumer prices continue to fall amid
weak final demand, it said.
The government warned that the employment situation will remain severe with the
unemployment rate standing at a near-record 5.3 percent in the forthcoming
year.
For the current fiscal year through March, the government is projecting that
the economy will contract 2.6 percent in real terms and 4.3 percent in nominal
terms.
The size of the expected nominal contraction in the current fiscal year, if
realized, would be the worst since 1955 when comparable data became available.
The government releases its projection for the nation's economic growth for the
upcoming fiscal year every December. The forecast serves as a basic target for
the government to achieve.
Prime Minister Yukio Hatoyama's government is placing greater emphasis on
achieving positive growth in nominal GDP as the reading is said to be closer
than real GDP to people's actual perceptions of economic conditions.
''I believe there will be no double-dip recession'' in Japan, Finance Minister
Hirohisa Fujii told a news conference after the Cabinet approved the economic
forecast.
Fujii said Japan's growth will pick up in tandem with many strong economies in
Asia and the government's measures to be financed by a record 92.30 trillion
yen budget for fiscal 2010.
According to recent government data, the Japanese economy has already started
picking up, with real GDP expanding for the second consecutive quarter through
the July-September period following a serious slump amid the global financial
crisis.
Since taking office in September, the new government led by the Democratic
Party of Japan has suspended part of the extra budget crafted by the previous
government for fiscal 2009, slashing what it sees as wasteful expenditures, and
has compiled a new 7.2 trillion yen economic stimulus package.
It is estimated that the partial revision of the extra budget will push real
GDP down by 0.1 percentage point in fiscal 2010.
On the other hand, the stimulus package, including the extension of government
incentives for the purchase of environmentally friendly cars and consumer
electronics, is expected to boost the nation's GDP by 0.6 point in fiscal 2010,
the government said.
For fiscal 2010, the government is predicting that private consumption will
rise 1.0 percent on a price-adjusted basis, capital investment will increase
3.1 percent and exports will surge 8.3 percent.
The projected 5.3 percent jobless rate for fiscal 2010 is just shy of the
estimated record 5.4 percent for fiscal 2009.
The consumer price index is projected to fall in the current fiscal year for
the first time in four years, at a rate of 1.6 percent, on the back of weak
demand and sharp falls in crude oil prices from the previous year's peak. The
CPI is expected to fall another 0.8 percent in fiscal 2010, the government
said.
Deputy Prime Minister Naoto Kan, who concurrently serves as state minister for
economic and fiscal policy, told a separate press conference it is
''regrettable'' that deflation is likely to continue in the next fiscal year as
shown in the forecast for the consumer price index.
But the government aims to end deflation by fiscal 2011 by working with the
Bank of Japan, he said, adding, ''Although it may be difficult in the next
fiscal year...we want to have zero deflation'' in fiscal 2011.
==Kyodo
(EDS: RECASTING WITH MORE INFO)
The Japanese government forecast Friday that the nation's economy will grow 1.4
percent in real terms in fiscal 2010, marking the first expansion in three
years on the back of recovering exports and its stimulus measures.
On a nominal basis, the government expects the economy, as measured by gross
domestic product, to grow 0.4 percent in the year starting April, also the
first expansion in three years.
The forecast shows, however, that the nation's economy will remain in deflation
-- a situation in which the unadjusted nominal growth rate is lower than the
inflation-adjusted real growth rate -- as consumer prices continue to fall amid
weak final demand, it said.
The government warned that the employment situation will remain severe with the
unemployment rate standing at a near-record 5.3 percent in the forthcoming
year.
For the current fiscal year through March, the government is projecting that
the economy will contract 2.6 percent in real terms and 4.3 percent in nominal
terms.
The size of the expected nominal contraction in the current fiscal year, if
realized, would be the worst since 1955 when comparable data became available.
The government releases its projection for the nation's economic growth for the
upcoming fiscal year every December. The forecast serves as a basic target for
the government to achieve.
Prime Minister Yukio Hatoyama's government is placing greater emphasis on
achieving positive growth in nominal GDP as the reading is said to be closer
than real GDP to people's actual perceptions of economic conditions.
''I believe there will be no double-dip recession'' in Japan, Finance Minister
Hirohisa Fujii told a news conference after the Cabinet approved the economic
forecast.
Fujii said Japan's growth will pick up in tandem with many strong economies in
Asia and the government's measures to be financed by a record 92.30 trillion
yen budget for fiscal 2010.
According to recent government data, the Japanese economy has already started
picking up, with real GDP expanding for the second consecutive quarter through
the July-September period following a serious slump amid the global financial
crisis.
Since taking office in September, the new government led by the Democratic
Party of Japan has suspended part of the extra budget crafted by the previous
government for fiscal 2009, slashing what it sees as wasteful expenditures, and
has compiled a new 7.2 trillion yen economic stimulus package.
It is estimated that the partial revision of the extra budget will push real
GDP down by 0.1 percentage point in fiscal 2010.
On the other hand, the stimulus package, including the extension of government
incentives for the purchase of environmentally friendly cars and consumer
electronics, is expected to boost the nation's GDP by 0.6 point in fiscal 2010,
the government said.
For fiscal 2010, the government is predicting that private consumption will
rise 1.0 percent on a price-adjusted basis, capital investment will increase
3.1 percent and exports will surge 8.3 percent.
The projected 5.3 percent jobless rate for fiscal 2010 is just shy of the
estimated record 5.4 percent for fiscal 2009.
The consumer price index is projected to fall in the current fiscal year for
the first time in four years, at a rate of 1.6 percent, on the back of weak
demand and sharp falls in crude oil prices from the previous year's peak. The
CPI is expected to fall another 0.8 percent in fiscal 2010, the government
said.
Deputy Prime Minister Naoto Kan, who concurrently serves as state minister for
economic and fiscal policy, told a separate press conference it is
''regrettable'' that deflation is likely to continue in the next fiscal year as
shown in the forecast for the consumer price index.
But the government aims to end deflation by fiscal 2011 by working with the
Bank of Japan, he said, adding, ''Although it may be difficult in the next
fiscal year...we want to have zero deflation'' in fiscal 2011.
==Kyodo
