Tokyo, July 26 (BNA): Japan raised its overall outlook for the economy for the first time in three months in July, pointing to a broader recovery in economic activity as the COVID-19 pandemic continues to subside.
The update came largely as the government became more positive about consumption and employment amid hopes that robust consumer activity would help shield the economy from the rising risks of slowing global demand, Reuters reported.
“The economy is rebounding gently,” the government said in its July economic report, describing the world’s third-largest economy in a way it has not done since May 2013.
The government has raised its view on private consumption, saying it has been rebounding gently as it has become more optimistic about spending on services such as overnight accommodations and transportation.
Analysts were generally less optimistic about private consumption in Japan, which accounts for more than half the economy, warning that higher prices could suppress consumption.
The economy is expected to return to growth in the second quarter after the January-March contraction, although its recovery has been particularly pressured by prolonged disruptions in the supply of parts and high-tech chips.
In its July report, the government raised its view on working conditions, and reported an upward trend in the number of workers, adding that the number of women who work regularly is on the rise.
The government also raised its view on imports, which it said reflects strong domestic demand.
However, the government warned of the need to pay attention to downside risks from rising raw material costs and supply constraints, as well as fluctuations in financial and capital markets amid tightening monetary conditions around the world.
MI