The Japanese government has cut its economic assessment for the first time since October 2011, saying that the country’s economy could be in for additional risk if the global economy slows further and markets become more volatile.
Reuters reported Tuesday that the government’s outlook was more pessimistic than that of the Bank of Japan (BOJ), which had said the economy was picking up at a moderate pace. Economists sided with the Japanese government’s assessment.
In its July report, the government had said that the economy was recovering moderately on reconstruction demand but remarked that there were difficulties. In the August report, it still mentioned moderate recovery but instead pointed to “weak movements,” a more downbeat outlook. The Cabinet Office’s monthly report for August said in part, “The economy is moderately recovering helped by reconstruction demand, while some weak movements were seen recently.”
Citing slowdowns in the U.S. and China, coming on top of lessening demand from Europe, the government said that it also foresaw a reduction in the world economy.