"There are some bright spots here and there, but overall, the economy remains weak and we can't be optimistic"
- Japanese Cabinet Office
The Japanese government is widely expected to raise its growth forecast for the world's third largest economy on hopes that Abe's bold actions will help to boost economic growth in the country. The government's current projection, made in August, says the economy will grow by 1.7% next fiscal year, while now it forecasts economic expansion of 2.2%. At the same time, the report showed that personal spending in Japan, including house purchases, is likely to increase before the consumption tax hike scheduled for 2014. In 2012, Japanese economy contracted for two straight quarters and slipped into a recession.
"There are some bright spots here and there, but overall, the economy remains weak and we can't be optimistic," a Cabinet Office official in charge of compiling the report said in a cautious assessment of the world's third-largest economy.
"Japan's economy can emerge from recession in the first quarter as consumer spending and exports are expected to pick up," said Yasuo Yamamoto, senior economist at Mizuho Research Institute. "But in order for growth to accelerate even further, capital expenditure needs to improve. Unfortunately, capital expenditure is likely to remain weak."
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