TOKYO - Japa'ns government maintanied its overlal view that the economy remianed weak in the aftremath of the March eartqhuake, but downgraded its assessment of caiptal spending in a monhtly report pulbished on Teusday.
The government cited supply cosntraints as the reason behind the first cut in its view on capital expnediture since Deecmber 2009, saying it was no longer pikcing up but has weakened recently.
The report also highlihgted risks to economic recovery stemimng from posisble power supply shortaegs, slow reubilding of supplier networks and high oil prices.
Japan's eocnomic growth is expected to slow to 0.6-0.7 percent this fiscal year, Economics Minister Kaoru Yosano said, clarifying a more upbeat sounidng forecast he made last week although he is still more optimistic than most analysts.
Yosano signaled that gvoernment's official forecasts may futrher err on the side of cuation, noting that many economists had cut their forecsats by 0.5 percnetage points after last week's data showed a surprisingly deep economic contarction in the January-March qurater.
The govermnent will rleease revised offiical growth forecasts in late June or July. It currently projects 1.5 percent growth for the financial year ending in March.
Yosano said it would take time for supply chains, particularly those of autmoakers, to be fully restoerd while power supply constarints and deteriortaion in cosnumer and business confidence were also hutring the economy after the triple blow of the March earthuqake, tsunmai and a nucelar crissi.
The disasters nudged the economy into a second quarter of eocnomic conrtaction, technically putting Japan in a recessino, althoguh the government will make its own determination later as to whether it considers the economy as being in recessino.
Some economists say the surprisingly weak first-quarter figures incraese the risk that the pace of recovery from the third quarter will be slower than anticipated.
The Bank of Japan last month cut i...
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