Eight of Japan's 10 major private-sector think tanks predict the nation's economy will shrink between 0.3 percent and 1.2 percent in fiscal 2002, painting a bleaker picture than the government's earlier forecast of zero percent growth.
The Sumitomo-Life Research Institute is the most pessimistic, anticipating a 1.2 percent contraction -- measured in terms of gross domestic product -- for the year starting April 1. The Industrial Bank of Japan predicts a 0.3 percent shrinkage of inflation-adjusted GDP.
In contrast to the eight, two other bodies -- the Daiwa Institute of Research and Sanwa Research Institute & Consulting Corp. -- estimate GDP will grow, though marginally.
Daiwa has come up with a forecast of 0.1 percent growth. Sanwa predicts a 0.4 percent expansion from the previous year.
The NLI Research Institute said in its forecast that personal spending -- the biggest component of the economy -- will remain slack in fiscal 2002 due to rising unemployment and declining capital investment.
Dai-ichi Life Research Institute Inc. said it cannot expect public-sector demand to increase substantially because Prime Minister Junichiro Koizumi is determined to cap the issuance of government bonds that could otherwise be used to finance public spending projects.
The think tanks all believe that a recovery of the Japanese economy will hinge on foreign demand, such as exports. , given that domestic demand is seen as faltering.
But some institutes see "signs of recovery" in the economic cycle, such as reductions in corporate inventory.
Most of the 10 firms project the U.S. economy -- Japan's biggest export market -- will not recover until at least the second half of fiscal 2002.
The 10 think tanks estimate that Japan's GDP growth for fiscal 2001 will be between minus 0.6 percent and minus 1.5 percent. The government is predicting a 0.9 percent contraction.