November 9, 2001
Cabinet Office
Government of Japan

Revised Estimates of Economic Outlook for FY2001



     Following the deceleration of the U.S. economy triggered by the deteriorating business conditions in IT-related industries, the global economy started to slow down from early 2001.  Uncertainties regarding economic prospects have been intensified since then, in particular after the terrorist attacks in the U.S. on September 11.  Against this background, it is judged that the government outlook of 1.7 percent growth in real terms for FY2001, which was decided last January, will be difficult to achieve.

     The government has decided on its Advanced Reform Program and the supplementary budget for FY2001.  Herewith the Cabinet Office publishes the revised estimates of economic outlook for FY2001; all recent policies and developments have been taken into consideration.

     While employment creation is expected through the implementation of the Advanced Reform Program, a decline in exports caused by the slowing world economy adversely affects production and business investment.  Consequently, net exports and private demand fall significantly.  Growth of private consumption decelerates.

     As a result, GDP is projected to decline by 0.9 percent in real terms in FY2001 (see attachment).