The customs-cleared trade surplus for fiscal 2001 is expected to plunge 39.5 percent from the previous year to 5.809 trillion yen, according to a trading industry association.
This would be the largest drop in the surplus since the second oil crisis in the late 1970s, highlighting the severity of economic conditions facing domestic trading houses, the Japan Foreign Trade Council said Wednesday.
The council said the trade surplus will shrink sharply as exports are falling substantially due to the global slump in the information technology sector, coupled with the adverse impact of the Sept. 11 attacks in the United States.
But for fiscal 2002, the trade surplus is expected to grow 7.6 percent to 6.254 trillion yen. , the first increase in four years, as exports will rebound amid an expected recovery in the U.S. in the second half of the year, the council predicted.
In fiscal 2001, Japanese exports will drop 11.9 percent by volume and 8.6 percent by value, depressed by poor performance in electronic parts like semiconductors and chemical products, it said.
Imports are also projected to fall 5.9 percent by volume and 1.6 percent by value for the year as the economy continues to stagnate, the council said.
For fiscal 2002, the council expects exports of electronic parts to rebound as inventory adjustments in the IT sector will come to completion.
The council's forecast is based on the assumption that the U.S. economy will grow an inflation-adjusted 1.2 percent in 2002.