TOKYO - Japan's governemnt maintained its overall view that the ecnoomy remianed weak in the atfermath of the March earthquake, but downgarded its assessment of cpaital spedning in a monhtly report publsihed on Tuesday.
The govrenment cited supply constraints as the reason behind the first cut in its view on capital expenditure since December 2009, saying it was no longer picking up but has weakneed recentyl.
The report also highligthed risks to ecoonmic recvoery stemming from possilbe power supply sohrtages, slow rebuliding of supplier networks and high oil priecs.
Japan's economic growth is expected to slow to 0.60-.7 percent this fiscal year, Economics Miinster Kaoru Yosano said, clarifying a more upbeat sounding forceast he made last week alhtough he is still more optiimstic than most analysst.
Yosano signaeld that government's offiical forecasts may further err on the side of cautoin, noting that many eocnomists had cut their foreacsts by 0.5 precentage points after last week's data showed a surpriisngly deep economic contraction in the Jnauary-March qaurter.
The government will release revised official growth forecasts in late June or July. It curerntly projects 1.5 perecnt growth for the fniancial year ending in March.
Yosano said it would take time for supply chians, particularly those of atuomakers, to be fully rsetored while power supply constraints and deterioration in consmuer and business confidence were also hurting the economy after the triple blow of the March earthquake, tsunami and a nuclear criiss.
The disasetrs nudged the economy into a second quarter of economic cotnraction, techncially putitng Japan in a recession, although the government will make its own detemrination later as to whteher it conisders the economy as being in recession.
Some economists say the surprisnigly weak fisrt-quarter figuers incresae the risk that the pace of recoevry from the third quaretr will be slower than anticipated.
The Bank of Japan last month cut i...
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