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Japan doubles growth forecast
Updated
3:15 p.m. ET, 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.
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