84% of Japanese companies see economic growth in 2022

About 84% of large Japanese companies expect the country’s economy to grow in 2022, driven by the pickup in personal consumption in hopes the coronavirus pandemic abates, a Kyodo investigation found on Sunday. News.

In the survey of 106 companies, including Toyota Motor Corp. and SoftBank Group Corp., 13 companies predicted the economy will stagnate as people remain cautious of the pandemic. But none of the companies said they would contract.

Of the companies surveyed, 84 expect moderate growth in the coming year, while five expect more solid expansion.

With multiple responses authorized, 91% of those expecting growth cited a pickup in consumer spending, followed by 64% predicting that the unusual situation caused by the pandemic will return to normal, with 35% predicting that capital investment will increase and 19% looking to the future for a recovery in the US economy.

The overall percentage of companies forecasting growth in the world’s third-largest economy is up from 74% in a similar Kyodo News poll a year earlier.

Prime Minister Fumio Kishida has pledged to minimize the spread of the Omicron variant of the coronavirus while acting quickly to get the economy back on track.

Commuters wearing masks to protect themselves against the coronavirus walk around Shibuya Station in Tokyo on November 5, 2021. (Kyodo) == Kyodo

The fifth wave of infections, which took place when Tokyo hosted the Olympics last summer, prompted the government to declare a state of emergency in a number of prefectures and urge people to refrain to make non-essential outings.

The lifting of the state of emergency on October 1 raised expectations that demand will approach pre-pandemic levels in a number of industries, particularly those related to recreation such as travel and shopping. restaurants.

Japan has yet to experience a noticeable increase in economic activity relative to the United States and Europe, where so-called revenge spending is evident.

Meanwhile, among the 13 companies that expected the economy to stagnate, rising material costs, weak consumer spending and rising COVID-19 infections were the main reasons.

A food industry company said: “Countermeasures against the coronavirus are still insufficient and it will take time for (the economy) to return to pre-pandemic levels.”

The number of new COVID-19 cases remained low in Japan after the fifth wave thanks to advances in vaccinations. But community transmissions of the Omicron strain have been reported in some areas, raising fears of a new wave of infections.

Japanese consumers also continued to tighten their purse strings, as prices for some daily supplies rose due to rising raw material costs and the weakening Japanese yen.

Among the main political elements of Kishida, the Kyodo News survey found that 54% of companies support the promotion of digital transformation.

Kishida’s push for renewables followed with 48% support.

As part of the goal of reducing carbon dioxide emissions to net zero by 2050, the government is aiming for renewables to account for 36-38% of Japan’s total power generation capacity over the course of of fiscal year 2030, i.e. more than double the 18% recorded in fiscal year 2019.

Some 39% of the companies surveyed said they think it is desirable for renewables to be between 35% and 39%, while 20% said they think this energy should be 40% or more of the capacity. total.

Kyodo News conducted the survey between mid-November and early December. The 106 companies also include ANA Holdings Inc., Seven & i Holdings Co., Nintendo Co., and Panasonic Corp.

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