Japanese growth forecast modified<\/p>\n
TOKYO (AFP): The Japanese cabinet modified yesterday its
\ngrowth forecasts for the coming year to take into account the
\nearthquake in western Japan as Nomura Research Institute
\nprojected a major stimulus over two years.<\/p>\n
\"Next year's figures should be considered with some margin,\"
\nEconomic Planning Agency director-general Masahiko Komura said
\nafter the cabinet approved the agency's official growth forecast
\nfor the year starting in April.<\/p>\n
Komura told a news conference that the quake would add an
\n\"unpredictable factor\" to the agency's forecast of 2.8 percent
\ngrowth in gross domestic product (GDP) for the upcoming fiscal
\nyear.<\/p>\n
Government officials said the phrase had been added to the
\nagency's official forecast to qualify the projection announced in
\nDecember.<\/p>\n
\"It is hard to predict the impact because it will cause both
\nnegative and positive effects,\" Komura said. But he added: \"I
\ndon't think there will be a large difference.\"<\/p>\n
International Trade and Industry Minister Ryutaro Hashimoto
\nreportedly questioned the relevance of the GDP forecasts.<\/p>\n
\"My question is whether or not projections made before the
\nearthquake are really useful,\" he said.<\/p>\n
\"The quake's impact on the future is very serious,\" Hashimoto
\nsaid. \"Our attention is focussing on the hardest-hit Kobe area
\nbut significantly serious effects are already emerging in its
\nenvirons such as Osaka.<\/p>\n
But Nomura Research Institute reckoned the earthquake would
\nboost GDP by between 1.5 percent and 2.9 percent over two years.
\nThe affiliate of Japan's top securities firm, Nomura Securities
\nCo. Ltd., also said that quake-related import demand was likely
\nto range from 900 billion yen and 2,000 billion yen (US$9 billion
\nand $20 billion).<\/p>\n
Nomura estimated earthquake damage at anywhere between four
\ntrillion yen and eight trillion yen ($40 billion and $80
\nbillion), accounting for between 0.8 percent and 1.6 percent of
\ngross domestic product.<\/p>\n
Beneficial<\/p>\n
The institute said that while the devastation would have a
\nnegative effect on the economy at first, the long-term impact
\nwould be largely beneficial, echoing similar remarks made by
\nother economists over the past few days.<\/p>\n
Potential recovery demand could have the effect of expanding
\nthe economy by between 0.5 percent and 1.0 percent in the fiscal
\nyear starting in April. But domestic production is likely to
\ncontract in the short term with GDP for the current quarter
\nending in March shrinking by 0.3 percent to 0.8 percent.<\/p>\n
The Japanese government meanwhile said it would start
\nmonitoring the prices of more than 70 commodities including
\nconsumer goods, raw materials and foods amid fears of quake-
\ninduced inflationary pressures.<\/p>\n
An economic planning agency official said the monitoring
\nprocedures, to started next week and to last for about two weeks,
\nwould be carried out by three ministries and agencies and also
\ncover distribution costs.<\/p>\n
Under the new measures, the international trade and industry
\nministry will monitor prices for such commodities as oil, steel
\nand cement. The agriculture, forestry and fisheries will monitor
\nfood prices and the economic planning agency will follow the
\nprices of daily necessities, the official said.<\/p>\n
Despite initial fears that the quake would boost prices for
\nindustrial materials, little evidence of inflationary pressures
\nhas been observed so far. Even steel prices have been relatively
\nstable despite the closure of two steelworks operated by Kobe
\nSteel Ltd.<\/p>\n
The Yomiuri Shimbun reported yesterday that steelmakers,
\ncement producers and glass manufacturers had more than enough
\ncapacity to meet an expected 10 percent increase in demand for
\ntheir products in the aftermath of the quake.<\/p>\n
Steel demand is likely to be boosted by anywhere between
\n500,000 tons and 800,000 tons with the rebuilding of apartments,
\noffices, highways, bridges and port facilities, the newspaper
\nsaid.<\/p>\n
The Nihon Keizai Shimbun reported separately that
\nmanufacturers of instant noodles, pre-cooked rice and batteries
\nwere already boosting production to meet strong demand and cover
\nreduced output at plants in the Kobe area.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/japanese-growth-forecast-modified-1447893297",
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