Japanese government plans slower pace of recovery, but worsens exports
On Friday, the government maintained its view that the pace of economic recovery from the shock caused by the coronavirus pandemic has “weakened” in its October monthly assessment while lowering its export assessment against a backdrop of supply shortage.
Japan’s economy “is picking up, although the pace has weakened” due to the severe situation caused by the virus, the Cabinet Office said in its overall assessment, after having revised it down the previous month for the first time. times in four months.
The report lowered its view on exports for the first time in seven months, saying they “are increasing at a slower pace” after continuing to “increase moderately” in September.
A government official told reporters that the impact of supply chain disruptions from the surge in COVID-19 cases in Southeast Asia has weighed on Japan’s industrial production, resulting in relatively slow exports not only automotive-related products, but also other items such as electrical appliances since July.
The government maintained its assessment for the industrial production component, saying it “is picking up, although some weakness has been observed recently”. Last month, the bureau downgraded it as the supply chain problem and a global semiconductor shortage forced some Japanese automakers to cut production.
The public investment component saw the first downward revision in six months, with the bureau saying it has been “weak recently, although at a high level.”
The official said a slowdown has been observed in the number of public works orders received, apparently affected by budget cuts for reconstruction projects linked to the 2011 earthquake and tsunami in the northeastern regions.
The ratings of the other major components remained unchanged. The bureau said private consumption “shows even more weakness”, using the same wording as the September report.
Although car sales have remained sluggish, “signs of improvement have appeared” in the restaurant business since more people have started eating out, following a sharp drop in new cases of the virus and the subsequent lifting of the government state of emergency across the country on October 10. 1, the official said.
With demands for people to stay home and for restaurants and bars to stop serving alcohol and close earlier, the month-long emergency has been repeatedly extended to cover 21 of the 47 prefectures in Japan, including Tokyo, at the end of August.
Looking ahead, he said the economy is expected to continue to recover, but warned that “full attention should be given” to a further increase in downside risks due to “negative effects across chains. supply “.
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