2 Minutes Read Reuters, TOKYO, July 6 – The government stated in revised forecasts announced on Tuesday that Japan’s economy will recover to pre-pandemic levels by the end of this year, aided by healthy exports and consumer spending bolstered by success in vaccines. In a mid-year assessment, the government now predicts that the economy will grow by 3.7 percent in the fiscal year ending in March, and that real gross domestic product (GDP) will eventually surpass the 547 trillion yen ($4.9 trillion) level set in October-December 2019. “Japan’s recovery will be sluggish in the first half of this fiscal year, but it will accelerate in the second half thanks to consistent rises in exports and capital expenditure,” the ministry said, adding that services spending will also increase. The predictions appear to imply a slower expansion than the government’s 4.0 percent growth estimate for this fiscal year in January. However, this is mostly due to the GDP contracting at a lower-than-expected 4.6 percent in fiscal 2020. As the pace of exports slows, growth for the following fiscal year is likely to decrease to 2.2 percent. Strong domestic demand, on the other hand, is expected to push GDP to a new high of 558 trillion yen, according to predictions used to shape policy and the state budget. The estimates come after a central bank report on Monday that portrayed a cautiously optimistic picture of regional economies, indicating that officials are debating whether to increase monetary or fiscal intervention anytime soon. In terms of vaccines, the world’s third-largest economy is currently falling behind the United States, the United Kingdom, and several European countries. Japan has been obliged to retain “quasi” state of emergency restrictions weeks before the Tokyo Olympic Games begin on July 23. (1 dollar Equals 110.8800 yen) (Leika Kihara contributed reporting, and Edwina Gibbs edited the piece.)/n
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