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The Cabinet Office said Friday it has revised its economic growth projection for fiscal 2003 upward to 0.1 percent in nominal terms and 2.1 percent in real terms.

If the 0.1 percent target is achieved, it would be the first expansion on a nominal basis in three years.

The latest projection compares with January’s 0.2 percent contraction in nominal terms and 0.6 percent growth in real terms.

Economy and fiscal policy minister Heizo Takenaka said brisk corporate spending on plant and equipment is the main reason behind the upward revision.

The Cabinet Office said Japan’s economy is expected to move toward a moderate recovery centering on private demand in fiscal 2003.

Although the Cabinet Office does not reveal revised figures in each component in nominal terms, it revised its forecast for corporate spending on plant and equipment upward to 8.5 percent growth in real terms from 1.8 percent.

Estimated growth in private consumption was also revised upward to 0.8 percent from an initial 0.4 percent.

The revision comes after the Cabinet Office announced earlier this month that the nation’s economy as measured by gross domestic product expanded by an annualized 1.2 percent in nominal terms and an annualized 3.9 percent in real terms in the April-June quarter. The Japanese economy has shown signs of export-led improvement.

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