Consumer and business confidence down Economists say they are unsure how the government's GDP figures are compiled and fault them for being too volatile and coming out late. But other recent data also show a downward drift. Consumer confidence has eroded significantly. That suggests an impending crash in Japanese consumer spending, which accounts for 55 percent of the economy and has held up relatively well. The U.S. slowdown has already hurt demand for Japanese products.
Business confidence is low, which has led to slower commercial and industrial spending.
A survey released by the government's Economic and Social Research Institute on Tuesday showed business sentiment hit minus 31, its worst level since the last quarter of 1998. Businesses said they expect to cut capital expenditures by 5.5 percent in the fiscal year through March 2002. There is some chance Koizumi's high public popularity can swing sentiment in Japan. But he faces a long battle in tackling the deep-rooted problems facing its economy. Koizumi has said he wants to tackle structural and fiscal reform.