Japan’s economy bottomed out in April 1999 after more than two years of downturn, an advisory panel to the Economic Planning Agency said Monday.
The judgment was made at a meeting of the Economic Data Examination Committee, a seven-member panel that advises the director general of the EPA’s Research Bureau.
The economy began to contract in April 1997, after the government increased the consumption tax rate from 3 percent to 5 percent. The ensuing 25-month decline was Japan’s third longest since the end of World War II.
The nation’s longest postwar economic downturn was the 36-month period that began shortly after the second global oil crisis and lasted until February 1983.
The second longest was the 32-month period between March 1991 and October 1993 after the economic bubble built on sky-high stock and land prices finally popped.
The advisory panel’s assessment was based on the EPA’s economic activity statistics, a variety of indicators that measure corporate activity, personal spending and employment.
Panel Chairman Miyohei Shinohara, an honorary professor at Tokyo International University, told a news conference that Monday’s judgment should not be taken as a declaration that the Japanese economy has recovered.
Looking back to the most recent downward cycle, he said the weakness during the period occurred as the financial system was rocked by massive bad-loan woes and some mistakes in the government’s economic policy management.
Shinohara also said the past four expansionary cycles of the economy lasted an average of 25 months.
From this perspective, the economy may expand for at least another 10 months before hitting a cyclical peak.
He said he is optimistic about the economy’s prospects but unsure if it will enter a solid growth course.