NEW YORK (Kyodo) The United Nations said in a report released Tuesday that Japan's economy will grow 1.9 percent this year as a moderate recovery continues and improving corporate earnings produce a favorable impact on personal spending.
Japan has finally cleared up the bad-loan mess that caused its prolonged economic slump, the United Nations said in its world economic outlook report.
Japan is close to pulling out of the deflation that's been dogging it for more than seven years and consumer prices are expected to post year-on-year rises in 2006, it said.
The United Nations cited the government's massive budget deficit as a risk factor for Japan and also warned against making an early shift in monetary policy, calling on the Bank of Japan to maintain its ultraeasy credit policy until deflation is completely out the picture.
The U.N. estimates the world economy will grow 3.3 percent in 2006, up from the estimate of 3.2 percent for 2005.
The U.S. economy is estimated to grow 3.1 percent, while China's will likely expand 8.3 percent, falling below 9 percent for the first time in four years.