The International Monetary Fund (IMF) said today it will probably raise its forecast for Japan's economic growth for this year when it issues its next global economic outlook.
The bullish view, coming on the heels of robust growth figures for the latest quarter released this week, was underscored by the government's monthly economic report, which said Japan's recent recovery was both broad and steady.
While higher oil prices and a potential cooling in the Chinese and US economies posed a risk, the IMF said Japan's recovery from a decade of stagnation was picking up and urged policy-makers to keep up efforts to revitalise the economy.
"Looking at the current conditions relative to our previous forecast, we're more likely to revise our forecast for Japan up, rather significantly," Mr Daniel Citrin, deputy director of the IMF's Asia-Pacific department, told reporters after an annual consultation with Japanese officials on economic policy.
Predicting that the forecast for 2004 growth would be raised to nearly 4 per cent from a previous projection of 3.4 per cent, Mr Citrin said work on the next twice-yearly World Economic Outlook, due out in September, would begin next month.
The Japanese government later issued an upbeat monthly assessment of the economy, saying a broader sector of the economy was enjoying an upturn.
Although that was the same as its view presented in April, the latest report included an upgrade on the jobs market, reflecting data last month which showed the unemployment rate fell to a three-year low of 4.7 per cent in March.
Encouraging news also came from a government announcement showing that the tertiary sector index, a yardstick for the broadly defined services economy, rose 1.0 per cent in March from a month earlier.
That matched a consensus market forecast and compared with a 3.9 per cent decline in February. A breakdown showed the tertiary sector index was helped higher by a 2.7 per cent rise in the wholesale/retail category.