Compared with the dour forecasts for economic performance in the United States and Western Europe, the outlook for Japan's economy in 1982 is predictably bouyant.
Consumer price inflation, now running at an annual rate of about 4 percent, is, by the accounts of most government and private economists here, firmly under control. Unemployment, at just over 2 percent, is enviably low by Western standards and likely to stick there in the coming year. Fed by booming export sales, industrial activity is prospering and almost sure to lead Japan, once again, to the highest level of economic growth among any of the major advanced economies.
At the same time, however, the Japanese have become increasingly concerned that their relative economic successes--and the stunning trade and payments surpluses they have piled up over the past year--could trigger a serious protectionist backlash among trading partners in the West, particularly as those countries battle mounting levels of joblessness.
According to government forecasts recently announced here, the economy will grow, in overall terms, by 5.2 percent in fiscal 1982, which begins April 1 here. Officials at Japan's Economic Planning Agency (EPA) have asserted that, in the coming year, an upsurge in domestic demand--goods and services purchased inside Japan--will offset the country's overwhelming reliance on exports as the major prop to economic growth.
Few private-sector economists, on the other hand, put much stock in such predictions. What they look for, generally, is a growth rate of between 3 percent and 4 percent in a year in which Japan's trade and payments surpluses will continue to expand, perhaps enormously, in the absence of any effective government-sponsored measures to prime the economic pump at home.
"The central issue for the economy this year," said Zenichi Ishikawa, a senior analyst at Daiwa Securities, "is whether we can stimulate the domestic economy to pull in more imports of raw materials and the like to counter expanding imports. If we can't, trade friction is likely to get much worse."
At this point, observers such as Ishikawa remain skeptical. Prime Minister Zenko Suzuki's government has embarked on a fiscal austerity drive for 1982 that might be the envy of the most ardent Reagan budget-balancers and supply-siders.
In a bid to wipe out huge yearly budgetary deficits by 1984, Tokyo's draft budget for the upcoming fiscal year outlines the lowest increases in government spending in 26 years. Appropriations for all categories in the $226 billion budget are scheduled to be held to an average increase of 6.2 percent, and those for welfare and social security payments and education are set to expand by considerably lesser amounts.
Spending on national defense, one of the few exceptions, will be allowed to rise by 7.54 percent, largely on the insistence of Reagan administration officials who have charged that Japan has not been doing enough to meet its obligations in light of heavy American military commitments in the Western Pacific.
"A balanced budget cannot be achieved by 1984," said Koei Narusawa, managing director of the Bank of Tokyo. "Many economists think the target itself is quite all right but should be postponed and pursued with more flexibility."
The government, he pointed out, has rejected personal income tax cuts over the past several years with the result that, under Japan's progressive tax structure, the tax bite has actually increased, helping to shave disposable incomes and keep consumers wary of spending more. Consumer spending, the largest single element in Japanese domestic demand, is expected to remain weak throughout 1982, according to most private economic forecasts here.
In an effort to square the economic circle, government economists have planned to spark consumer spending by lowering interest rates on housing loans and appropriating marginally more official funds for home-buying subsidies. Officials have projected a 10 percent rise in housing starts in 1982 over last year's 1.2 million units, the lowest figure in a decade. But Daiwa's Ishikawa said that rapidly escalating land prices and housing construction costs are likely to keep new home purchases out of the reach of the average Japanese.
Business investment in capital equipment steadily improved in 1981 and, while it is expected to expand during the current year, the outlook is mixed. Major Japanese manufacturers are pushing ahead with plans to ensure future growth in rates of productivity and profitability by installing industrial robots and the latest technology in factories.
Meanwhile, however, small and medium enterprises, which still carry much of the weight in Japan's two-tiered economy but generally have fewer export opportunities, have been hardest hit by slowly growing domestic demand. In many cases, they have been unable to afford investment plans already on the books.
These difficulties may be enhanced this year, industrial observers have charged, because of Tokyo's plans to hold spending on public works projects to zero growth under the 1982 budget. In the past, a large share of such appropriations has been funneled into the small-business sector to keep activity running along.
In the absence of any major fiscal incentives sponsored by the government, Narusawa said, "we can't expect a very high bounce in domestic demand. Economic growth will be sustained by external factors."
Official government forecasts predict that Japan's overall trade surplus will grow only marginally from an estimated $26 billion in the current fiscal year to $30 billion in fiscal 1982, while the current accounts surplus will increase from $10 billion to $12 billion over the same period.
Mitsubishi Research Institute, however, has predicted that the trade and current accounts figures could balloon to $42 billion and $26 billion, respectively, in the next fiscal year, estimates in line with those of other major private economic think tanks here.
In a step toward easing trade frictions which are likely to be fueled by escalating surpluses, Japan has pledged to implement a broad package of measures designed to boost imports. These include a review of product testing and customs and procedures, which foreign businessmen often claim are used to keep their products out of Japan, and a possible speeding up of Japan's commitment to put in place across-the-board tariff reductions under the Tokyo round of tariff agreements.
"All these measures may be useful to counteract the frustration (of foreign businessmen), but they will certainly only have a token effect on (Japan's) trade surpluses over the next one to two years," said one economic analyst here. In 1982, Tokyo's determination to pursue tight-fisted budget policies, he explained, "means there is, unfortunately, little hope for a dramatic correction in our external trade."