The Japanese government downgraded its assessment of the economy in a monthly report for the first time in almost two years today, as weak consumption cast a cloud over the nation's long-lasting recovery.
But a government official said the economy continues to expand and that meant the current period of growth became the longest postwar expansionary cycle this month, surpassing the so-called Izanagi boom of the late 1960s.
"The economy is recovering, although there is some weakness in consumption," the Cabinet Office said in its November report, the first downgrade of the assessment since December 2004.
"As we saw a considerable decline in consumption in the recently announced GDP data (for the July-September quarter), we cannot ignore it," said Hiroyuki Inoue, a counsellor at the Cabinet Office.
While the current expansion that began in February 2002 outlasts the 57-month Izanagi boom, the pace of growth has been much more modest than previous booms. A panel of experts set up by the Cabinet Office officially decides the length of economic cycles and the decision usually comes a year after a cycle ends.
"The report in effect confirms that the current expansion has entered its 58th month, outlasting Izanagi, although it will be finalised later," Inoue said.