• Kyodo


The government will probably downgrade the economy for the first time in 10 months in its August report as exports and production fell amid the decelerating global economy, sources said Saturday.

Economic and fiscal policy minister Motohisa Furukawa is scheduled to submit the report at a Cabinet meeting Tuesday.

In its July report, the government said the economy was “on the way to recovery at a moderate pace due partly to reconstruction demand, although difficulties continue to prevail,” using the same expression for the third successive month.

In the August report, however, the government may downgrade its views on exports and production, with exports to China and other emerging economies as well as parts of Europe slowing, and output of such goods expected to weaken, the sources said.

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