Growth forecasts adjusted
The government is upgrading its growth forecast for this year, but has tangibly cut its prognosis for next year, the business daily Handelsblatt reported yesterday. Berlin, which is scheduled to publish its latest updated growth forecasts next Wednesday, is penciling in growth of 1 percent for both this year and next year, the newspaper said, quoting government sources. That represents an increase for this year from an earlier prognosis of 0.7 percent, but a sharp downward revision for next year from a previous forecast of 1.6 percent.
Economy is weak: minister
The government has downgraded its view of the economy for the third straight month as worries about Europe’s debt crisis and China’s slowdown intensify, adding pressure on the central bank to offer further stimulus to support growth. Economics Minister Seiji Maehara said that while it was too early to judge whether Japan may slip into recession, the economy’s trend was weak, as a lack of global demand hurts exports. The downgrade in assessment followed the Bank of Japan’s warning last week that economic activity was leveling off and that it may not recover until well into next year.
Economy shrank in Q3
The economy shrank by 1.5 percent in the third quarter, but avoided a technical recession after growth in the previous three months was adjusted, government figures showed yesterday. The Ministry of Trade and Industry said the export-driven city-state was still on track to achieve annual growth of between 1.5 percent and 2.5 percent this year. “Economic growth in the second quarter was better than expected, resulting in an upward revision of quarter-on-quarter annualized growth from the preliminary estimates of [minus]-0.7 percent to 0.2 percent,” it said.
Mining boosts production
The government said industrial production rose 2.7 percent in August, more than expected on a rebound in mining activity, though investment still appeared weak. Mining output rose 2 percent, marking a turnaround from a 5.5 percent contraction a year earlier. Manufacturing rose 2.9 percent and electricity output increased 1.9 percent in August from a year earlier. Yesterday’s data also showed that production of capital goods — a sign of investment in physical assets, such as machinery — slid 1.7 percent. The government revised its July figures, saying output contracted 0.2 percent, down from its earlier estimate of 0.1 percent growth.
Infosys profit disappoints
Profit at India’s Infosys Technologies rose 4.9 percent in US dollar terms for the third quarter, the company said yesterday, missing expectations amid tepid demand from global clients struggling with economic uncertainty. Net income for the third quarter was US$431 million. Revenue grew 2.9 percent from a year ago, to US$1.78 billion.
Sony’s credit rating cut
Sony Corp, reeling from four annual losses, had its credit rating lowered one level by Moody’s Investors Service, which cited weak cash flow and losses at the company’s TV and mobile phone operations. The rating was cut to “Baa2,” the second-lowest investment grade, from “Baa1,” with a negative outlook, Moody’s said in a report yesterday. The decision affects about US$4.2 billion in debt, according to Moody’s.