The government maintained its upbeat assessment of the economy in a report released Thursday, confirming that the current expansion has tied the record for the longest postwar boom.
The monthly economic report released by the Cabinet Office says the economy is “recovering,” a characterization it has used for nine months in a row. The current expansion, which began in February 2002, is now 57 months long, equaling the “Izanagi boom” that ran from November 1965 to July 1970.
A Cabinet Office official said although the pace of growth has been slower than the Izanagi boom, which saw double-digit annual growth, the fact that the recovery has lasted so long proves Japan’s economy has “come to maturity.”
The current long-term pickup in the economy owes to restructuring efforts by companies, robust external demand based on favorable global economic conditions, the quantitative easing monetary policy and swift disposal of bad loans,” the official said.
He said Japan has witnessed a “rare phenomenon” in which economic growth continues despite deflation, and predicted that the expansion will likely surpass the Izanagi boom to become the longest in postwar Japan.
A panel of experts at the Cabinet Office is tasked with determining when economic expansions begin and end. A formal confirmation by the panel that a growth phase has ended usually comes at least a year after the economy turns downward, the official said.
In the October report, the government again avoided declaring an end to deflation. The official said the economy is “not in a state of deflation, but has yet to reach the stage where we can announce a full departure from it.”
In the document, the government said it will make efforts with the Bank of Japan to “secure the trend of price stability.”
The monthly paper leaves unchanged the government’s basic assessment of various economic indicators. It says corporate profits are improving and business investment is increasing.
The employment situation is “improving on a broad basis, although some severe aspects remain,” says the report. Private consumption has been “decelerating recently,” while exports have been “flat” and industrial production is “increasing moderately.”
Although the report does not change the basic economic assessment, it points to some downside risks for future trends in private income, machinery orders and production in the information technology sector.
The official said private consumption has been decelerating because the corporate sector’s spillover effects on personal spending have weakened, causing incomes to level off.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.