Japanese economy bottomed out in November 2012: government
TOKYO -- The economic swoon that descended on Japan in May 2012 reached a trough only seven months later, according to a tentative review being conducted by the Japanese government.
The Cabinet Office will identify the month the economic downturn hit bottom based on input from experts at a study group later this month. It has provisionally identified that the most recent economic peak was reached in April 2012. If it names November 2012 as the trough, then the contraction was the second-shortest in postwar Japan, after the four-month recession that ended in October 1951.
Economic indicators will be used to determine the timing of each economic phase. A diffusion index is computed based on industrial production and other statistics to confirm when the phases changed.
If the trough was in fact reached in November 2012, that means the economy entered the recovery phase in December of that year, when Prime Minister Shinzo Abe took office.
With summer 2013 chosen as the date to begin discussing a consumption tax hike to 8%, the Abe government hammered out economic packages of some 10 trillion yen ($97.68 billion) in fiscal 2012 and 5 trillion yen the following year, adding them to the respective supplementary budgets. The government apparently boosted fiscal spending when the recovery phase began, bolstering the economy as a result.