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Takashi Imai, chairman of the Federation of Economic Organizations (Keidanren), called on the government Friday to implement structural reforms to achieve sustainable economic recovery.

The government “needs to promote information technology and other economic structural changes,” the chief of Japan’s most powerful business lobby said.

Imai also said Japan should ensure the economy recovers through appropriate fiscal and monetary policies.

He made the comment following the government’s announcement earlier Friday that Japan’s gross domestic product grew a real 2.4 percent in the January-March quarter from the previous quarter, a real 0.5 percent expansion in fiscal 1999 for the first growth in three years.

The economy neared the government target of 0.6 percent growth in fiscal 1999 as a full-scale recovery of capital spending took off and personal spending probably hit bottom, Imai said.

If the government succeeds in steadily promoting necessary reforms, economic growth for fiscal 2000 can be expected to largely surpass the government goal of 1 percent, due chiefly to active private-sector demand, he said.

Meanwhile, business leaders welcomed Japan’s economic expansion in fiscal 1999 but warned against the quick conclusion that the economy is on a full-scale recovery path.

Hiroshi Okuda, chairman of the Japan Automobile Manufacturers’ Association, said he is “pleased” with the first economic growth in three years.

The expansion on a yearly basis is “encouraging indeed,” said Shiro Akai, chairman of Mitsui Home Co.

Although growth fell short of the government’s target, Kazumasa Koshiba, chairman of the Japan Department Stores’ Association, said the expansion will favorably affect stagnant personal consumption.

Nevertheless, business leaders expressed reservations about the expansion.

Despite emerging signs of a pickup in department store sales, Takashimaya Co. incurred a drop in sales in the Tokyo area in May, and Koshiba said department store sales will see ups and downs for some time to come.

Although corporate capital spending has been on the rise, led by information technology-related investment, Etsuhiko Shoyama, chairman of top electric machinery maker Hitachi Ltd. said a self-sustaining economic recovery will not get fully under way until after the second half of fiscal 2000.

Okuda, who is also chairman of Toyota Motor Corp., said it is premature to conclude that auto sales have bottomed out.