OT (Overseas Topic) Japan says economy improving amid overall weakness

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Japan says economy improving amid overall weakness

WIRE:03/16/2000 20:21:00 ET

TOKYO (AP) _ The government revised its assessment of the economy Friday, saying signs of recovery are emerging but the overall situation remains severe.

That view came in a monthly report by the Economic Planning Agency. Its pronouncements are closely watched by businesses and analysts as key indicators of the government's thinking on the state of the world's second-largest economy.

In its March report, the agency cited emerging signs of recovery such as corporate capital investment and personal consumption on sounder footing than in the previous month. But the EPA also said that the recovery in consumer demand remains weak and the economy is still in a severe state.

"We're not at the stage where we can declare an economic recovery," said Takashi Omori, director of the agency's national economic affairs division.

Japan has been struggling for 10 years to emerge from its worst economic downturn since World War II.

The economy finally started growing again, then shrank in the July-September and October-December quarters of last year, pushing it back into a technical recession.

While the EPA maintains that the economy has been "improving at a modest pace" for the last several months, much of the improvement has been due to government support measures, such as gigantic public works projects and growing overseas demand, Omori said.

For the recovery to be self-sustaining, business investment and consumer spending, the pillars of private demand, must be on sound footing, Omori said.

"Consumption isn't on an improving trend and the employment situation is still severe," Omori said.

Copyright )2000 ABC News Internet Ventures

-- Possible Impact (posim@hotmail.com), March 16, 2000

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