Japan: Fiscal 2013 growth forecast at 2.5P

Jan. 28, 2013 at 12:21 AM
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TOKYO, Jan. 28 (UPI) -- The Japanese government Monday forecast 2.5 percent growth in fiscal 2013, citing an improving global economy and its own stimulus steps.

Speaking at a news conference, Economic and Fiscal Policy Minister Akira Amari expressed confidence about achieving the growth target, as the $220 billion fiscal and monetary stimulus package is expected to begin producing results -- including boosting domestic demand -- during the remainder of this fiscal ending in March and next fiscal staring in April, Kyodo News reported.

At a separate news conference, Finance Minister Taro Aso said the higher forecast is possible as risks to the global economy recede.

Japan has been struggling for years due to chronic deflation or falling prices, which has pushed the country -- the world's third largest economy after the United States and China -- into another recession.

Its export-reliant economy also must fight a rising yen, as that makes its products more expensive. The country suffered a trade deficit of $78 billion in 2012, up 2.7 percent from 2011.

The new government of Prime Minister Shinzo Abe has made as its top priority the need to pull the country out of deflation and to boost exports. Its efforts have included urging the country's central bank to undertake aggressive monetary easing and doubling inflation target to 2 percent.

The government said Monday inflation is likely to hit 0.5 percent in fiscal 2013, the first such rise since fiscal 2008. It anticipates the U.S. dollar to average 87.8 yen in the next fiscal year from 81.9 yen in fiscal 2012.

A weaker yen, besides boosting exports, would also encourage business investments and create jobs.

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