85754
Consumption likely stayed flat from the previous quarter.
Consumption likely stayed flat from the previous quarter.

Japan’s Economy Sputtering

Japan’s Economy Sputtering

Japan’s six-year economic recovery likely stumbled in the January-March quarter, as exports of electronic parts and other items stalled while rising prices for everyday goods turned off consumers.

Real gross domestic product including goods prices slipped an annualized 0.2% on the year, based on the average of assessments from 12 private research firms, hinting at the first contraction since the final quarter of 2015. Japan only recently reached its first eight-quarter growth streak in 28 years with a 1.6% uptick in the October-December period, Nikkei reported.
Export values grew just 0.5% on the year in January-March, the analysts estimate, following two consecutive quarters of growth in the 2% range. With sales slumping for Apple’s iPhone and other smartphones, exports of growth-driving electronic parts and other machinery sank by double-digit percentages, finance ministry statistics show.
Though one quarterly decline would not negate Japan’s broader recovery, the notion that a small deceleration in exports could drag overall growth into negative territory raises questions about reliance on foreign demand.
Personal consumption, a pillar of domestic demand, likely stayed flat from the previous quarter on a real basis, the researchers said. Though Japan’s workers won their biggest raises in two decades this year, consumer buying power suffers when goods prices rise. Poor harvests afflicted by cold drove price increases for staple vegetables.
Housing investment apparently sank 2.1% as private lenders curbed excessive apartment loans and the construction of rental homes stalled. Corporate demand for labor-saving equipment lifted capital expenditures by 0.4%, but the bump was too slight to support growth overall.
The prevailing view holds that Japan will regain an annualized growth rate in the 1% range in April-June and beyond. Throughout 2017, the annualized rate of real growth surpassed the potential growth rate, seen to be about 1%. The benefits of Japan’s bigger pay raises also “will become clear from May onward,” said Mitsumaru Kumagai at the Daiwa Institute of Research.
Many of the experts consider external demand firm as well. “As the fruits of US tax cuts appear in earnest, the global economy will fare better,” said Yoshiki Shinke at the Dai-ichi Life Research Institute.
But for fiscal 2018 overall, private analysts project that real GDP growth will slow from the previous year to 1.2%.

Short URL : https://goo.gl/vE56om
  1. https://goo.gl/veaNFi
  • https://goo.gl/LJzEsU
  • https://goo.gl/pvS5Qk
  • https://goo.gl/opiosZ
  • https://goo.gl/Ve6VJo

You can also read ...

China Warned of Ballooning SOEs
Former chief of the World Bank Robert Zoellick cautioned China...
Business confidence fell to its lowest level since August 2013 and around 7% of companies expected a contraction.
According to data from the International Monetary Fund in...
Shrinking unemployment in the US, Japan and the eurozone finally forces companies  to lift wages to retain and attract staff.
Workers in the world's richest countries are getting their...
New Zealand Q2 GDP Growth Picking Up
New Zealand’s economic growth is expected to have accelerated...
Saudi Sovereign Fund Secures $11 Billion Loan
Saudi Arabia's sovereign wealth fund said Monday it had...
Lira Eases Against Dollar
Turkey’s lira weakened against the dollar on Monday as...
By 2025 more than half of all current workplace tasks  will be performed by machines.
Robots will handle 52% of current work tasks by 2025, almost...
Myanmar Businesses Want Lower Taxes
Myanmar businesses are urging the government to lower the...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus