Government of Japan still sees a gradual recovery of the economy
The government continues to believe that household consumption is picking up steam.
The Japanese government is still banking on a gradual recovery of the economy, suggesting that it will recover after a slowdown in the first quarter, shows its monthly economic report for the month of April released Monday.
The government continues to believe that household consumption is picking up steam, particularly with the increase in spending on home electronics and restaurant outings.
It notes a gradual rise in investment spending, as the previous month. The Bank of Japan (BOJ) Tankan survey released earlier this month showed that SMEs plan to increase their investment.
The survey also showed that companies of all sizes felt that their production capacity was insufficient to meet demand, which should encourage their investment, the government said.
The longest growth phase of the Japanese economy since the speculative bubble of the 1980s must have stalled in the first quarter but should restart later this year, according to a Reuters survey of economists.
The 39 economists polled between 4 and 12 April estimated that the economy is expected to grow at an annualized rate of 0.5 percent in the first quarter with the slowdown in consumer spending and industrial production.
This average forecast is lower than the growth rate of 1.6 percent recorded in the fourth quarter of 2017.
Japan, the world's third-largest economy, has seen eight consecutive quarters of growth through 2017, its longest expansion since the 1980s.
One of the risks weighing on the Japanese economy lies in possible trade tensions with the United States.
(With inputs from Reuters)