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POLITICS

Government revises economic assessment downward for first time in a year

  • 2015-10-15 15:00:00
  • , Tokyo Shimbun
  • Translation

(Tokyo Shimbun: October 15, 2015 – p. 7)

 

 In its October monthly economic report released on Oct. 14, the Japanese government downgraded its monthly economic assessment, stating, “The Japanese economy is on a moderate recovery track, although weakness can be seen in some areas.” This is the first time in one year that the government has revised its official view downward. However, it is effectively the second consecutive downward revision, as the government as backed away from indicating a clear position in September by saying, “The government neither maintains nor downgrades its assessment.”

 

 Monthly economic report for October (arrows indicate changes from previous month)

September

October

Monthly economic assessment

“The Japanese economy is on a moderate recovery, while slowness can be seen in some areas.”

“The Japanese economy is on a moderate recovery, while weakness can be seen in some areas.”

Private consumption

“holds firm as a whole”

“holds firm as a whole”

->

Industrial production

"flat"

"in a weak tone"

Exports

"in a weak tone"

"in a weak tone"

->

Business investment

“picking up generally”

“picking up generally”

->

 Limits of Abenomics: Economic stagnation increases

 

 In its monthly economic report for October, the government lowered its monthly assessment for the first time in one year, thus revealing the disparity between reality and the administration’s boasting of the positive impact of “Abenomics,” PM Abe’s economic policy. The stagnant mood pervading the Japanese economy is growing stronger, and the approach of glossing over this by avoiding a clear economic assessment, as was done in September, cannot go on any longer.

 

 Minister in Charge of Economic Revitalization Akira Amari explained that the government said in September that it “neither maintains nor downgrades its assessment” because “the economy’s undercurrent continues to recover moderately and factors to strengthen this are being put into place, but giving a clearer expression could erase the effect of such (subtle) factors.” He emphasized that it was not an arbitrary “announcement from Imperial General Headquarters.”

 The September report was issued right after the passage of the security-related legislation, and many think that concern that public criticism [of the government] might spread to economic policy led to the administration’s vague announcement. Indices issued after that, including the Indices of Industrial Production and the Statistical Survey of Orders Received for Machinery, were below market expectations, so a revision [in October] was unavoidable. The monthly economic report is important basic data for setting the direction for economic and fiscal management. The government must objectively analyze changes in the situation and not be swayed by political conditions. (Abridged)

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