24 top execs say economy to hit bottom after 2009

The Yomiuri Shimbun

Eighty percent of top corporate executives in the country predict the economy will hit bottom in 2010 or later, according to a Yomiuri Shimbun survey.

In the survey of the heads of 30 major companies, 24 said the economy, which has been slowing down, would hit its lowest point in 2010 or later.

Only five said it would happen by the end of this year.

Twenty-nine presidents predicted the 2009 real economic growth rate would be negative, with 12 saying the rate would be lower than minus 1 percent.

The government has forecast no growth for fiscal 2009 in real terms.

The Yomiuri survey showed, therefore, that the heads of the major companies were more pessimistic about the growth rate than the government.

Asked about the current state of the economy, 28 executives said it was clearly declining, while two said it was gradually declining. All of those surveyed agreed that the economy was in recession.

In last year's survey, none of the respondents gave such a view. The latest survey indicates that the financial crisis that started in the United States has rapidly undermined business confidence among Japanese managers.

The executives also were asked about how the economy could be put on track to recovery, and were allowed to give multiple answers.

Twenty-seven said the U.S. economy needed to recover, while 10 said growth in consumer spending and nine said implementation of further economic stimulus measures by the government were needed.

The executives also were asked to give multiple answers for the most important issues that should be tackled by the Cabinet of Prime Minister Taro Aso regarding the economy.

Stabilization of financial markets and further implementation of economic stimulus measures to increase public spending were each chosen by 14 executives.

Since summer, the government has come up with economic stimulus measures totaling 75 trillion yen, including distribution of a flat-sum cash benefit.

However, many corporate heads still believe that additional measures are needed.

Asked about Aso's proposal for increasing the consumption tax in fiscal 2011, five said they agreed with the idea, while nine said they understood the situation as inevitable, showing that nearly half of those surveyed either agreed with or accepted the tax hike plan.

The survey was conducted mostly through interviews in December.

(Jan. 4, 2009)