JAPAN TRADE SURPLUS WILL GROW AGAIN IN 1987, OECD
  Japan's trade surplus is likely to
  continue to grow in 1987, as sales of Japanese goods abroad
  increase while domestic demand remains sluggish, the
  Organization for Economic Cooperation and Development (OECD)
  said.
      In its latest half-yearly review of the world economy, the
  OECD said Japan managed to considerably reduce its surplus last
  year, when domestic demand grew by four pct in 1986 while
  export markets rose by only two pct.
      But it said this differential between the growth of
  domestic and foreign demand would reverse in 1987 and 1988,
  "thus weakening the international adjustment process."
      It forecast a slowing in domestic growth to little over two
  pct but with a rise in exports of 3.3 pct in 1987 and 3.6 pct
  in 1988. As a result, the current account surplus in 1987 will
  rise to 95 billion dlrs from 86 billion in 1986, although in
  1988 it should fall back to 87 billion dlrs.
      The OECD outlook did not take account of the 6,000 billion
  yen package announced last month to stimulate domestic demand
  and increase imports to Japan. However, OECD officials said the
  measures will significantly strengthen domestic demand, quite
  possibly exceeding one pct GNP when the full effects have
  worked through, and thus will provide some stimulus to imports.
      The OECD outlook said, "Continued large current account
  surpluses and the further build-up of an already-substantial
  net external asset position could well lead to upward pressure
  on the yen." It said that further appreciation could then lead
  manufacturers to postpone their investment plans and thus
  weaken domestic growth.
      The OECD said Japan's Gross National Product was likely to
  gorw an annual two pct in 1987 and 1988, below 1986's 2.5 pct
  growth. But it said Japan would continue its good performance
  on inflation, with a zero figure expected in 1987 compared to a
  0.6 pct rise in consumer prices last year.
  

