Asia Times: GDP revision brings goals within reach



	August 14, 1999	atimes.com

Japan

GDP revision brings goals within reach

TOKYO - The Economic Planning Agency (EPA) on Friday revised its GDP growth figure for the January-March quarter to 2.0 percent on an inflation-adjusted basis. The EPA's initial estimate was 1.9 percent.

This equates to an annualized 8.1 percent, up 0.2 point from the earlier figure. The first quarter of 1999 saw Japan's first truly strong growth since the 2.9 percent marked in January-March 1996.

Most of the increase from initial estimates comes from a 0.6 point upward revision of estimated capital investment growth in the private sector, to 3.1 percent. The new figure reflects the latest data from a corporate business and investment survey conducted in June.

The agency also revised upward its estimate of real economic growth for the year ending March 31, to minus 1.9 percent from minus 2.0 percent.

The revision for the January-March quarter creates a base for annualized GDP growth of at least 0.9 percent in fiscal 1999 even if all four quarters yield no growth at all. And attainment of the official government target of 0.5 percent GDP growth is possible even should GDP shrink 0.2 percent in each of the following quarters.

EPA Chief Taichi Sakaiya expressed confidence in achieving the government target. ''I have never doubted the possibility,'' he stated. He noted the current fragile state of private-sector demand however. ''The upward revision is a figure for the period six months ago. Our business sentiment judgment has not changed.'' The GDP revision is basically a matter of math, Sakaiya added, and the real economy remains unchanged.

A closer look at the revision reveals that the preliminary growth rate of 1.93 percent announced in June has been raised as well, but only by 0.05 point to 1.98 percent.

(Nikkei/Asia Pulse)

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