japon situation 13jan02
Japan's economy to slip as world recovers: U.N.The World Economic Situation and Prospects 2002 says Japan's economic woes reflect a "deepening slowdown" in external demand and structural problems, warning that recovery in Japan is not likely to occur anytime soon.
"Measures for resolving bad loans and improving public finances may exacerbate the cyclical contraction in the short term," the U.N. report says, adding that monetary easing has so far had little effect in lifting the economy.
The Japanese economy, which grew a moderate 2.4 percent in 2000, contracted an estimated 0.7 percent last year, the report says.
Elsewhere in the world, recovery from the economic downturn, which began early in 2001 and was aggravated by the Sept. 11 attacks in the United States, is likely to take place slowly in the year ahead, the report says.
The U.S. economy, which plunged into a recession in March, is projected to grow 1.25 percent this year following 1 percent growth last year.
U.S. economic problems cited in the report include a low savings rate, high stock prices and a trade deficit putting the economy on an unstable footing.
For the European Union, the U.N. forecast put the combined growth rate for the 15-member group at 1.5 percent this year, compared with 1.6 percent last year.
The U.N. report says the moderate improvement in the projected global growth rate this year -- 1.5 percent vs. 1.3 percent last year -- is "hostage" to a number of economic uncertainties, notably the high dependency of the global economy on the recovery of the U.S. economy.
For developing nations as a whole, the economy this year is expected to show greater vitality, growing by 3.5 percent over last year's 2.3 percent, the report says.
For developing countries in East Asia, growth is projected at 3.25 percent, up from 0.9 percent this year. The figure excludes China.
In South Asia, the growth rate for this year was projected at 5.5 percent, up from 4.6 percent last year.
The Japan Times: Jan. 12, 2002
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