Deflationary pressure easing in Japan: economic minister
TOKYO, : Economy and fiscal policy minister Heizo Takenaka has expressed optimism over the prospects for the Japanese economy, saying deflationary pressure is easing gradually.
"Deflationary pressure is easing down gradually although the pace is slow," Takenaka told a televised debate with economists.
"The financial sector is calming down, and corporate activities are improving, which have pushed investment forward," Takenaka said.
"And a lot of experts anticipate that the US, Asian and European economies will move toward a favorable direction," he said.
Takenaka said he was confident that the Japanese economy would achieve growth led by domestic demand and lower its reliance on exports for the next fiscal year, which starts in April.
On Friday, the Japanese government said it has set its official forecast for economic growth at 1.8 percent in real terms and 0.5 percent in nominal terms for the year to March 2005.
Takenaka said he would stick to the target of 2.0 percent growth in nominal terms in two years.
"As a matter of course, we must maintain the target. It is very important to do so," Takenaka said.
"Together with the Bank of Japan, we will create a situation where money supply increases. We forecast the economy will improve, aiming at the target."
On Wednesday, international credit ratings agency Fitch affirmed Japan's ratings, saying the pace of a decline in the country's credit worthiness has slowed.
Japan's economy is expected to grow 2.25 percent in 2003, the fastest since 2000, supported by a sharp upturn in private business investment growth to around 8.0 percent, Fitch said.
The Bank of Japan's quarterly Tankan survey, released earlier this month, showed a sharp uptick in business confidence across the board but also pointed to a slowdown in the coming months, on concerns the stronger yen will hit exports.
- AFP
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