The once and future boom

IN FISCAL 1996 (which ends on March 31st), Japan will probably have achieved GDP growth of 2.5% or more, as forecast by the government. That will be among the highest of the G7 countries. The short-term pessimism over the economy that has recently been pervasive in Tokyo and elsewhere is based primarily on two assumptions. The first is that the ¥7 trillion ($57 billion) tax increase in April 1997 will be a major drag on consumption and may result in a “double dip” recovery. The second is that the non-performing loan problems, which are worsening, may result in bankruptcy for some large financial institutions.