Japanese govt keeps assessment that 'economy recovering' unchanged for Jan

Japanese govt keeps assessment that 'economy recovering' unchanged for Jan

	Published : Mon, 22 Jan 2007 10:58 By : Agencies Print this Story

TOKYO (XFN-ASIA) - The government has left its assessment of the economy unchanged for this month, saying that the recovery continues, albeit with some weakness in consumer spending.

In its latest monthly report, approved at a cabinet meeting, the Cabinet Office reiterates what it said last month -- that the economy 'is recovering, despite some weakness in consumption.'

A Cabinet Office official said: 'Private consumption was flat, against the background of sluggish income growth and almost flat consumer confidence.'

Consumption is recovering from a big drop during the summer here, which was due to unusually rainy weather, the official added.

Figures already released show that private consumption in the third quarter of last year was 0.9 pct lower than in the second.

In November, household incomes were 1.7 pct higher than a year before and the incomes of heads of households were 2.6 pct higher.

But the government remains confident about the prospects for the economy, again citing sound corporate activity that is spilling over to the household sector.

Its report for this month says exactly what its report for last month said: 'As for short-term prospects, the economic recovery is expected to continue, supported by domestic private demand, as high corporate profits feed into the household sector.'

However, this month's report says the surplus in the goods and services account is increasing. Last month's said the surplus was flat.

'But the change has not developed to the extent of affecting the overall economic assessment,' the Cabinet Office official remarked.

In November, the surplus in the goods and services account was 963.2 bln yen, 69 pct more than a year before.

This month's report reiterates the government's view that there is improvement in other aspects of the economy, such as corporate profits, capital spending and labor conditions.

It also reiterates the government's opinion that exports are flat and that industrial production is increasingly moderately.

(1 usd = 121.32 yen)

kaori.kaneko@xfn.com