(Bloomberg) -- Japan’s government stuck to its view the economy is recovering despite the sharpest contraction in more than five years last quarter and forecasts from private sector analysts that the coronavirus epidemic will trigger a recession.
In it’s monthly report for February, released Thursday, the Cabinet Office maintained its stance the economy is “recovering at a moderate pace” amid continued weakness in manufacturing and exports.
The unchanged assessment suggests Prime Minister Shinzo Abe’s government is in no hurry to offer more economic aid after a recent stimulus package, even amid heightened concern the coronavirus will hit Japan’s supply chains, exports and tourism. Economy Minister Yasutoshi Nishimura this week said fast implementation of existing measures takes priority over anything additional.
While the Cabinet Office maintained it’s overall view, details of its report showed deteriorating conditions. The report cut the assessment of bankruptcies for the first time in almost five years, citing rising numbers of business failures. Import levels, an indicator of consumer demand and factory production, were also downgraded.
On the positive side, the government cited rising consumer prices and an improving jobs market. Private consumption also continues to pick up, the report said, an assessment that was at odds with recent data showing a drop in household spending since October’s sales tax hike.
©2020 Bloomberg L.P.
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