The government said Tuesday it has revised downward its key gauge of the state of the economy for April due to weak production data.

The revision leaves the index below the boom-or-bust line of 50 percent for the fourth straight month.

The Cabinet Office said the index of coincident indicators was revised to 10 percent for April from a preliminary 14.3 percent, hit mainly by weaknesses in sales of small and midsize manufacturers and in consumption of raw materials in the manufacturing sector.

A reading above 50 percent is considered a sign of economic expansion, while a reading below that is believed to indicate contraction, according to government officials.

The index for March, February and January has also been revised downward to 9.1 percent, 9.1 percent and 45.5 percent from preliminary readings of 11.1 percent, 10 percent and 50 percent, respectively.

The revision left the index below 50 percent for the fourth straight month, the longest period it has been below that level since a 17-month stretch between August 1997 and December 1998.

A Cabinet Office official said, “The revised data underscored the weakness in production activities in Japan. The government will keep monitoring the future course of the economy carefully.”

Meanwhile, the index of leading indicators, a measure of economic growth six to nine months down the road, was revised upward to 33.3 percent from a preliminary 28.6 percent due to a fall in raw materials inventories in the manufacturing sector and growth in private-sector machinery orders, it said.

The index of leading indicators was below 50 percent for the fourth consecutive month.

The index of lagging indicators, which gauges economic performance in the recent past, was revised upward to 42.9 percent from a preliminary 33.3 percent due to positive data on inventories.

It was below 50 percent for the second straight month.

GDP forecast revision

Economic minister Heizo Takenaka said Tuesday that he will consider revising its gross domestic product growth forecast for fiscal 2001 “in the course of the fiscal year.”

“I would like to devise a (statistical compilation) system with an eye to revising a forecast for an economic growth rate in the course of the fiscal year, just as the United States does,” Takenaka told the House of Councilors’ Committee on Financial Affairs.

The creation of the statistical system is designed to identify ups and downs in the fundamentals of the economy mirrored in GDP growth forecasts, said Takenaka, minister in charge of economic and fiscal policy and information technology.

Late last year, the government set its growth target at 1.7 percent in real terms in fiscal 2001.

The Cabinet Office’s Council on Fiscal and Economic Policy is contemplating revising the GDP forecast.

Sources close to the council said Saturday it is considering revising the forecast down to 0.5 percent growth for the current fiscal year.

Takenaka also said he would like to see the Diet release its own forecast on GDP growth.

A comparison with the government’s own projection and such a parliamentary forecast would help bolster the accuracy of the GDP estimate, he said.

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