Asia Times: Think tanks revise growth forecasts upward



	September 18, 1999	atimes.com

Japan

Think tanks revise growth forecasts upward

TOKYO - Four private-sector research institutes have revised upward their forecasts for Japan's economic growth for this fiscal year to 0.3-0.9 percent in real terms, following an April-June rise in gross domestic product, the second consecutive quarterly increase.

The Daiwa Institute of Research Ltd sharply lifted its projection to growth of plus 0.9 percent from minus 0.8 percent. On expectation of an expansion in private demand in the second half of this fiscal year, the institute revised upward corporate earnings forecasts and consumer spending projections. The think tank predicts that 5 trillion yen ($45 billion) in "genuine" public investment will be added in the expected second supplementary budget.

Fuji Research Institute Corp sees growth of 0.8 percent because "the recession has come to an end", according to the body. The possibility that the Japanese economy will retreat, as the effects of public-works spending fade, is slight, a Fuji official said.

Sumitomo-Life Research Institute Inc revised its economic growth projection to plus 0.5 percent from minus 0.5 percent. It did, however, predict the economic recovery will lose momentum in autumn when the effect of the government economic package will have run its course. The institute said a truly sustainable economic recovery will not take hold until the next fiscal year.

Nomura Research Institute Ltd raised its forecast to plus 0.3 percent from minus 0.6 percent. It attributed improved conditions for business in the first half to government policies such as generous public investment and tax cuts. So as not to appear too confident, an official warned that "it is too early to declare a self-sustained recovery". The think tank foresees the economy will slide into a correctional phase in the second half. For fiscal 2000, Daiwa projects 1.9 percent economic growth, Fuji 1.0 percent and Sumitomo and Nomura 0.3 percent.

(Asia Pulse/Nikkei)

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