(MENAFN - Qatar News Agency) The Japanese Ministry of Economy, Trade and Industry said Thursday that its industrial output rose a seasonally adjusted 2.5% in December from November, in a sign the world's third-largest economy may be stabilizing thanks to stronger global demand and government spending.
The government of Prime Minister Shinzo Abe is already claiming progress in breaking the deflationary slump that has weighed on Japan's growth for years. Share prices are approaching three-year highs and many companies have reported improved profits thanks to a weakening of the Japanese yen against other major currencies.
Since Abe took office on Dec. 26, his administration has pushed ahead with a 20 trillion yen (220 billion) stimulus package, a hefty proposed budget for the coming fiscal year and a commitment by the central bank to unlimited monetary easing to help spur growth.
"I intend to have a deep discussion of the plans and seek public understanding to ensure transparency," Abe said during the televised legislative exchange . All that spending is meant to break the cycle of falling prices that is thought to be hindering business investment and hobbling growth.
"Generating enough demand to create a sustained recovery has been an uphill battle for policymakers," Moody's said in a commentary Thursday citing barriers to growth such as Japan's shrinking workforce and high savings rate. "Together, these moves could kick-start a recovery, assuming that stronger growth in Asia helps revive Japan's exports as well," it said.
The ministry, which based the data on a survey of 33,000 companies, attributed the drop to the rising use of part-time or temporary workers, who accounted for nearly 29% of all workers in 2012. December's increase in industrial output compared with a month-on-month drop of 1.4% in November.
Most analysts had forecast an improvement of more than 4% in December. METI said inventories fell 1.1% from the month before while shipments rose 4.4%.