Japan economy still in ‘severe situation,’ Cabinet Office reports

28-Nov-2020 Intellasia | JapanTimes | 6:02 AM Print This Post

The government kept its economic overview unchanged in its monthly report released Wednesday despite lowering its view on business investment.

“The Japanese economy is still in a severe situation due to the novel coronavirus, but it is showing movements of picking up,” said the November report compiled by the Cabinet Office.

The government adopted the same overview for the fifth straight month. The report was submitted at a meeting of economic ministers the same day.

It downgraded its assessment of business investment for the first time since September, saying that the sector has been “decreasing recently.” The October report noted its “weakness.”

Business investment “became increasingly likely to deteriorate,” given the sluggish results for software investment, a Cabinet Office official said.

The government kept its view on corporate earnings unchanged, although it altered the wording, adding a reference to “smaller declines” in profits at large companies.

Meanwhile, the government upgraded its assessment for industrial production, also for the first time since September, saying the sector was “picking up.” The October report said production was “showing movements of picking up.”

The upward revision was backed by robust exports, mainly of automobiles, to other Asian countries and the United States, as well as by domestic demand, the official said.

The official, however, said that “it is still too early to say that production is increasing.”

The government kept its assessment of private consumption unchanged, although according to the official it is returning to levels roughly on par with those of the past three years.

Consumption of services is recovering, mainly in the tourism and dining industries, but it still remains at low levels, he said.

The official also said attention should be paid to the impact of a resurgence of COVID-19 in the country.

Private consumption would be pushed down if “people become excessively hesitant about spending amid the resurgence,” he said.

The official also expressed concern that the government’s revision of its Go To Travel tourism promotion campaign may dampen recovering travel demand.

The government generally kept its economic outlook unchanged, saying that the economy “is expected to show movements of picking up,” while newly calling for full attention to “further downside risks” to the domestic and foreign economies due to the resurgence of the COVID-19 virus within and outside Japan.

The official also warned of the effects of virus-related restrictions in European countries on Japan’s exports.

https://www.japantimes.co.jp/news/2020/11/26/business/economy-outlook-cabinet-office/

 

Category: Japan

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