Japan Inc looking forward to a robust economic growth

About three quarter of Japanese companies predicts the economy to continue growing for at least another year, prolonging an already robust run. However, according to a Reuters poll, they were not as bullish as the market estimates.

Japan has recorded seven consecutive quarters of economic growth to end-September, the longest maintained stretch of expansion since the year 1994. Tokyo stock prices reached their highest in 26 years, meanwhile, quarterly data indicates corporate gains are close to record peaks.

However, about half of the firms predict that the economy will cease to expand by the middle of next year, with that number climbing to 71 percent for forecasts to end-2019. A planned tax increase, the diminishing of public works spending connected to the 2020 Tokyo Olympics and the worsening labor shortage were listed as impediments to future expansion.

Most of the firms refuse to believe that the recovery can sustain itself, but is instead dependent on spending that are connected to the Olympics, the firms do not further believe that the economy will be able to sustain by itself soon.

According to a Reuters company survey, there are no indications that the deflation would end this year.

Based on the Reuters poll revealed 20 out of 33 economists polled stated that the economic expansion would continue to grow through the end of the year 2020 or beyond, while 11 economists predicted that it would stop in the second half of 2019 and only 2 stated that it would halt in the first half of 2019.


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