Japanese Economy: Prospects For 1963

Press, Volume CII, Issue 30042, 29 January 1963, Page 17

Japanese Economy: Prospects For 1963

IBp R. X. BU«T, Tokyo cormpradrat Of "Th* Press’!

TOKYO, January 23. pccts tatMnsftttaßßl ihml ' win remain sempirrtfvsly quiet this year. The United States an* the Soviet Unton are expected to eosnpMentoe on Berite while it to thought improbable that there wifi he any real eenflet between the Seviet Union and Communist China thto year. Anticipated Chinese atomic test explosions later this year and continuing Chinese pressures in Asia were not expected to have immediate effects on strategy and trade, at least not in 1963. Meanwhile,. the prospects for the world economy were bright United States speiding and consumption was expected to increase while Europe appeared set to expend production. There was little prospect for any real development in South East Asia although continued foreign aid would prevent any worsening in the situation.

Japanese trading companies look forward to a brisk year with increases in both exports and imports, with imports possibly rising faater than exports. This anticipated trend is attributed to increased inventory investments under the Government’s “positive" Investment and credit plan to help business out of its two-year recession. Balance of Payments There is, however, some fear that the balance of payments may once again get out of hand. The balance has been in th? black for the last year or so but the amount of surplus in the running account has been declining since early last year while capital and International credit transactions have been steadily increasing. Increased loans from abroad have become necessary while an upturn in commodity prices was expected to become pronounced in the later half of the year. As this trend would adversely affect the export business, not too much hope could be placed on foreign exchange from additional exports improving the international balance of payments. It was feared the balance of payments would become a problem by midyear. Real trouble was expected

neat year, h UM the Ger* eminent would be teeing diffi* odhes in compiling the budget because of meagre treamiry reaourcee to finance the Government's loan and investmost programme and because at high commodity prices then anticipeted. The Government could not rely too heavily on bond flotation because of the danger of inflation. In Japan, 1083 was also expected to be a year of mergers in industry and ser- : vice enterprise. The pressure r of import liberalisation takes ■ effect on 88 per cent, pf . Japan’s imports from Octoi ber, 1982, with further steps . scheduled for April, could drive whole industries to the i point of bankruptcy unless > they become more efficient. ■ Under the previous policy of . full protection much domestic > industry over expanded. The • motor-car industry- for exi ample, has been criticised for I making too many different i models and pricing itself out I of world markets. Shipping, Chemicals The shipping industry has . been in a bed way for a long . time and has at last accepted . Government plans—as well . as Government aid—to merge . a tot of small and medium i sized'concerns into a few big . combines better able to hold . their own internationally. Overall, Japan is expected ! to stay prosperous and busy , in 1983, with only a few dark clouds appearing on the horizon towards the end of the year.