© Reuters. File photo: People crossing the road in the shopping and business district of Shinjuku, Tokyo, Japan, May 17, 2017. REUTERS/Toru Hanai
Tokyo (Reuters)-Japan kept its overall assessment of its economy unchanged for the second consecutive month in July, and still believes that the situation is still severe due to the impact of the coronavirus pandemic.
In the monthly report approved by the cabinet of Yoshihide Suga on Monday, the government stated that it should pay full attention to how infection trends affect domestic and foreign economies.
The government said in its assessment of the economic situation in July: “Although the economy continues to recover under the severe situation caused by the coronavirus, the economy in some areas has shown even more weakness.”
The authorities maintained their views on key economic components, such as private consumption-which accounts for more than half of gross domestic product (GDP)-and exports and output unchanged.
They said that Japan’s exports are gradually increasing due to the recovery of the overseas economy.
The Japanese government raised its assessment of business conditions for the first time in four months, mainly because the Bank of Japan’s April-June Tankan Business Confidence Survey showed signs of recovery in business conditions.
Authorities now describe business conditions as signs of improvement, even though they say the situation in some areas is still severe. This is a notch better than last month’s assessment, when they said that the improvement of business conditions is stagnating.
A Reuters survey last week showed that Japan’s economy may barely grow in the second quarter as it is struggling to cope with the impact of coronavirus containment measures in Tokyo and other major areas of economic activity, especially private spending.
The government will release preliminary estimates of the second quarter GDP on August 16.
The new state of emergency in the Tokyo Olympics that will last until August 22 is expected to hurt economic growth this quarter.
Analysts expect the Japanese economy to grow at an annual rate of 4.2%, lower than the 4.6% expected last month.
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