WASHINGTON – The International Monetary Fund will revise downward its forecast for Japan’s economic growth for 2001 to less than 1 percent, a senior IMF official said Monday.
IMF Deputy Managing Director Shigemitsu Sugisaki said the revision will be made when the IMF publishes the World Economic Outlook report on April 26.
The IMF projected the growth of Japan’s 2001 gross domestic product at 1.8 percent in September.
Sugisaki meanwhile indicated the IMF tolerates a weak yen, believing it will boost the flagging Japanese economy.
The current weakness of the yen against the dollar reflects the weakness of the Japanese economy itself, not the result of deliberate policy decisions, he said.
“Strong concern over the (yen) trend has yet to emerge within the IMF,” he told reporters, downplaying any possible negative impact a weak yen may have on the U.S. trade balance with Japan.
Sugisaki, a former Finance Ministry official, claimed that a weak yen would have positive effects on the overall Japanese economy, such as by improving corporate earnings, and would eventually benefit Japan’s trading partners.
Aso sees ’01 revision
Japan may revise downward its economic growth forecast for the current fiscal year in or after June if the U.S. economy continues to slow down, Taro Aso, minister of economic and fiscal policy, indicated Tuesday.
“When the U.S. economy continues to slow, it is only natural to expect that Japanese economic growth will also fall,” Aso told a regular news conference.
His remarks suggest that a sharp decline in U.S. economic growth may force Tokyo to trim its 1.7 percent growth forecast for gross domestic product — the total value of goods and services produced domestically — for the current fiscal year, which began April 1.
Aso said it is too early to decide on whether to revise it, however, indicating he wants to wait for GDP data for the January-March quarter, which will be released in June.
“It’s still April, and we’re still not at the stage to consider things to that extent,” Aso said.
Japan’s October-December GDP contracted a real 0.3 percent from the previous quarter, by the old calculation method, but grew 0.8 percent under the new method, according to government data.
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