Japan's government announced yesterday that it expects the country's real GDP to expand by 1.8 percent in the next fiscal year, reflecting an ongoing recovery, strong demand at home and abroad and eased concerns over deflation.
The projections, compiled by the Cabinet Office to help officials plan government policy, show Tokyo remains confident of continued economic growth, despite concerns over the rising yen and over whether the US economy will remain strong.
According to the forecast for the year beginning in April, consumer spending will rise 1.1 percent and private capital outlays will grow 7.2 percent. Domestic demand is expected to add an estimated 1.6 percentage points to growth, it said.
Japan's economy grew 1.6 percent in fiscal 2002, and Tokyo is targeting 2.1 percent growth for fiscal 2003, which ends on March 31 of next year.
Earlier this month, the government revised downward the GDP growth for the three months through September, from 0.6 percent to 0.3 percent. While overall growth was weaker than originally estimated, it marked the seventh straight quarter that the economy has expanded.
Even so, the world's second-largest economy has been stuck in a slowdown for more than a decade, sinking into recession between bouts of weak recovery.
The most recent upturn has been largely dependent on strong exports linked to rebounds in overseas economies. To make the economy less vulnerable, officials have consistently tried to stimulate domestic demand. But consumer spending, which makes up more than half of the Japanese economy, has been sluggish.
GDP is the value of a nation's goods and services.
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