March 11, 1999
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| March 11, 1999 | atimes.com | |
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| Japan Economy Economists divided over prospects for Japan recovery OSAKA - A group of economists agreedMonday the Japanese economy is close to bottoming out but weredivided over whether it will return to a recovery track infiscal 1999. The economists were participating in a Kobeforum sponsored by Nihon Keizai Shimbun and the JapanCenter for Economic Research (JCER). JCER Chairman Yutaka Kosai predicted the economy willshrink about 2.5 percent in fiscal 1998 ending March. ''The economyis bottoming out, but how quickly an upturn will begin remainsto be seen. The turning point will come when plant andequipment investment touches bottom,'' he said. Shigeru Matsushita, a director at Sanwa Research InstituteCorp., forecast the economy will shrink by between 2.4 and 2.5 percent this fiscalyear. ''Worries about the financial system have calmed, butactual economic activity remains in a severe state,'' he noted. Masaru Takagi, a professor at Meiji University, said, ''Theeconomy has bottomed out; judging from industrial productionand household spending figures, it recently started movingupward.'' On prospects for fiscal 1999, Masumi Sato, vicepresident of Kobe Steel Ltd. (TSE:5406), said the economy willlikely shrink between 0.8 and 0.9 percent, given that capital investment isexpected to decline nearly 10 percent year on year and employeesalary cuts will probably overwhelm the effects of planned tax cuts. ''An additional 7 trillion yen or so in government stimulusmeasures will be necessary if the government is to achieve itsgoal of 0.5 percent growth for the year,'' he added. Takagi forecast 1.0 percent growth for fiscal 1999, assuming thegovernment implements an extra 10 trillion yen in pump-primingmeasures, including 4 trillion yen in tax cuts. Matsushita predicted a growth rate of between minus 0.5 percentand minus 1.0 percent in the absence of additional stimulus measuresfrom the government. ''The rate will be minus 0.4 percent if thegovernment implements 3 trillion yen in actual fiscalspending, or 'mamizu','' he said. Kosai foresees a negative growth rate even if thegovernment comes up with additional stimuli. ''Companies arestill saddled with inefficient facilities,'' he said. (Asia Pulse/Nikkei) | |||||||||
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