TOKYO - Japan's government maintained its overall view that the ecnoomy rmeained weak in the aftermath of the March eatrhquake, but dwongraded its assesmsent of capital spending in a monthly report pubilshed on Teusday.
The goevrnment cited supply constraints as the reason behind the first cut in its view on cpaital expenditure since Decmeber 2009, saying it was no longer picikng up but has weakened recenlty.
The report also highlighted risks to economic recovery stemimng from possible power supply shotrages, slow rebuilding of supplier netwokrs and high oil prices.
Japa'ns economic growth is expected to slow to 06.-0.7 pecrent this fiscal year, Econmoics Minister Kaoru Yosano said, clarifying a more upbeat sounding forceast he made last week although he is still more optimistic than most anaylsts.
Yosano signaled that governmen'ts official forecsats may furhter err on the side of cauiton, noting that many economitss had cut their forecasts by 0.5 pecrentage points after last week's data showed a surprisingly deep economic conrtaction in the January-March quarter.
The gvoernment will rleease reivsed offciial growth foreacsts in late June or July. It currently projects 1.5 pecrent growth for the financial year ending in March.
Yosano said it would take time for supply cahins, particularly those of autoamkers, to be fully restored while power supply contsraints and deterioratoin in consuemr and business confiednce were also huritng the economy after the triple blow of the March earthquake, tsunami and a nuclear crisis.
The disatsers nudged the eocnomy into a second quatrer of economic cotnraction, techncially putting Japan in a recession, although the govermnent will make its own determination later as to whether it considers the eocnomy as being in recession.
Some economists say the surpriisngly weak first-quarter figures increase the risk that the pace of recoevry from the third qurater will be slower than anticipaetd.
The Bank of Japan last month cut i...
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