Heads of Japanese firms positive on economy

Heads of Japanese firms positive on economy

Japan - More than 60 per cent of the heads of 30 major companies expect the nation's economy to continue to recover, a Yomiuri Shimbun survey has found.

In the survey, 29 respondents saw the economy as currently on a recovery track. Regarding economic prospects for the next six months, 19 respondents, or over 60 per cent, expected a moderate recovery.

However, eight respondents said the economy would level off, while two others anticipated it would worsen rapidly. One respondent projected moderate deterioration.

Regarding the consumption tax increase in April, 12 respondents said their companies would see almost no negative effects, while seven others foresaw some negative impact. Three company heads expected their firms to suffer significant adverse effects from the tax hike.

Asked what measures the administration of Prime Minister Shinzo Abe and the Bank of Japan should give priority to, 19 respondents called for the swift implementation of the government's growth strategy, and 15 sought a cut in the effective corporate tax rate. Respondents were allowed to choose more than one answer.

Fourteen urged the government and the central bank to carry out regulatory and institutional reforms. The survey results indicate the top company officials have high hopes for the so-called third arrow of the Abenomics economic policy.

As for the possibility of real economic growth rate for 2014, which excludes the effects of price fluctuations, 12 people, the largest number, expected growth of 0.5 per cent to less than 1 per cent. Nine respondents projected 1 per cent to less than 1.5 per cent, while eight foresaw 1.5 per cent to less than 2 per cent. Most believed the economy would continue to grow moderately.

Asked when the economy was likely to exit from deflation-a top priority for the Abe administration-12 respondents said the exit could come in the second half of 2014, while two others eyed the first half of the year. Nearly half the respondents expected the administration to achieve the goal within the year.

 

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