80 per cent of top execs predict 2016 upturn in Japan economy

80 per cent of top execs predict 2016 upturn in Japan economy

About 80 per cent of the top executives at 30 major companies believe the economy will slowly pick up in the middle of this year, according to a New Year survey by The Yomiuri Shimbun.

When asked about the current economic situation, 15 respondents said the nation's economy is "recovering slowly." The remaining 15 said it was "at a standstill."

Regarding the economic prospects six months from now, 24 respondents, or 80 per cent, expected a brighter future, saying the economy will recover moderately. However, many of the corporate leaders were concerned about sluggish individual spending and a slowdown in the economies of China and other emerging nations.

In predicting the real economic growth rate for 2016, 18 leaders selected "from 1 per cent to less than 1.5 per cent" while nine chose "from 1.5 per cent to less than 2 per cent." Three others picked "from 0.5 per cent to less than 1 per cent" - suggesting a perception gap among the leaders regarding the momentum of the recovery.

On a multiple-answer question about possible factors behind an economic recovery, 17 pointed to a "recovery in consumer spending," while 13 picked an "increase in capital investment." Eleven chose an "improvement in employment conditions and an increase in wages."

Price trends have remained unchanged, but the majority of the business leaders expected increases in line with a moderate economic recovery. Nineteen predicted "about 1 per cent growth" in prices on average in 2016.

Twelve business leaders said the nation's economy will emerge from deflation by the end of 2016, and among them, five said deflation had already ended. Ten of the corporate executives said deflation will end starting in 2017 or onward, while eight did not know or did not answer.

Most of the leaders were concerned over the future of the Chinese economy, with 15 saying it will "slowly worsen" and 13 saying it will be "at a standstill."

Asked about the broad agreement on the Trans-Pacific Partnership, all the leaders expected it to play a favourable role in the economy, with 17 thinking it will make "a great contribution to the economy" and 13 saying it will "make a certain contribution."

The survey was conducted in December last year.

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