Japan doubles growth forecast

Wed Jul 21, 2004

The JOURNAL of COMMERCE ONLINE

The Japanese government on Wednesday announced it was doubling its forecast for the rate of economic growth this fiscal year to 3.5 percent, the fastest pace in eight years, bringing the world's second-largest economy closer to ending six years of deflation.

Growth in the year started April 1 will exceed the 1.8 percent pace forecast in December, the Cabinet Office said in Tokyo. Consumer prices will fall 0.1 percent this fiscal year, less than the earlier estimate of a 0.2 percent slide, it said.

Accelerating growth is easing years of falling prices that have sapped corporate profits and consumer demand. The expansion is also boosting tax revenue, helping Prime Minister Junichiro Koizumi meet his goal of curbing Japan's $6.6 trillion in public debt, the world's largest.

Growth would accelerate from an estimated 3.2 percent in the last fiscal year. By comparison, the Federal Reserve predicts U.S. growth of as much as 4.75 percent this calendar year. The European Central Bank's outlook for 2004 growth in the 12-nation euro region is 1.7 percent.

The Cabinet Office report, which is used by the government to estimate tax revenue and draft its budget, was submitted today to a meeting of Koizumi's key economic panel.

China exports surge in June

Mon Jul 12, 2004

The JOURNAL of COMMERCE ONLINE

China's exports surged 47 percent to a record in June, suggesting a pickup in demand in the United States, Europe and Japan will help sustain growth in the world's fastest-growing major economy.

Overseas shipments jumped more than expected to $51 billion after climbing 33 percent in May, the Beijing-based commerce ministry said on its Web site, and reported by Bloomberg News.

China's imports also beat economists' forecasts, surging 51 percent to $49 billion, their biggest gain in more than a decade.

China's surging trade may ease concern that government lending curbs will lead to a sharp slowdown in the world's seventh-biggest economy, damping demand for imports and driving down commodities prices. China's share of world trade has mushroomed to about 7 percent, almost triple what it was a decade ago, and the nation is the world's third-largest importer.

Premier Wen Jiabao aims to slow economic growth to 7 percent this year, from a seven-year high of 9.1 percent in 2003, and has ordered banks to curb lending to industries including steel, autos and real estate to help achieve this goal. The central bank has raised the amount of cash banks must set aside as reserves three times since September.