Japan's Economy Expected To Show Increase

TOKYO (Kyodo) -- The Japanese economy is expected to show an annualized real expansion of 1.6 percent in the April-June period over the previous quarter, marking the first increase in gross domestic product in five quarters, a government-affiliated research institute said Monday.

The nation's GDP is expected also to expand some 2.2 percent each in the July-September and October-December quarters, the Economic Planning Association said.

The association calculated the figures as average forecasts by 37 private-sector economists responding to its survey of 40 economists, conducted between May 25 and June 1.

The forecast reflects expectations that production of automobiles, electronic components and other industrial products will stop stalling thanks to a pickup in exports.

But given that the January-March quarter this calendar year saw the largest postwar shrinkage of 15.2 percent, putting the domestic economy into deeply negative territory at the end of fiscal 2008, the economy is forecast to mark an overall contraction of about 3.9 percent in fiscal 2009 to next March, the association said.

The economy is expected to expand in fiscal 2010 for the first time in three years but by a meager 1.1 percent.

Among other survey findings, the rate of unemployment is forecast to stay high after hitting 4.9 percent in the April-June quarter and the 5 percent level in the June-September quarter.

Noting the continuation of sluggish personal consumption, the economists forecast that Japan's nationwide consumer price index, excluding volatile fresh food prices, will fall about 1 percent in the April-June period from a year earlier and show a larger decline of more than 2 percent in the following quarter.

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