Japan Economy Growth:

 https://mainichi.jp/english/articles/20201116/p2g/00m/0bu/058000c

Article:

TOKYO (AP) -- Japan's economy grew at an annual rate of 21.4% in the last quarter in a recovery from the shocks of the pandemic driven by both private spending and exports.

The world's third largest economy had logged three straight quarters of contraction and was already in recession by the time the crisis hit. Preliminary data from the Cabinet Office released Monday show a distant road to a full recovery.

News that the economy returned to growth in the July-September quarter sent share prices higher in Tokyo. About an hour after the market opened the Nikkei 225 index was up 1.6%.

Ideas and Commentary:

Its always good when there is some news of economic recovery in the pandemic period. But at the same time, just how much of society has seen an improvement in economic activity?

Do we see real improvements in people lives, small business activity, in different sectors, and how about important tourism industry? Economic news reports is not going to report about every sector in an economy, its important to continue to think about the big picture.

Article:

Japan, like the rest of the world, is suffering from the slowdown brought on by business closures, plunging tourism and travel and social distancing measures for COVID-19.

On a quarterly basis, the economy grew 5.0%. The annual rate measures how much the growth would have been if that had continued for a year.

The data showed improvements in private consumption, the main driver of growth, and exports, including vehicles and auto parts. The rebound was expected, although analysts warn it won't be enough to mark a return to normal.

Ideas and Commentary:

A 5.0% growth always sound good. But, not to be a skeptic, but to just think about what does it really mean exactly. Private consumption, or consumer spending showed improvement, but by how much and how does that compare to pre-pandemic spending? 

Probably the main question being asked everywhere is, while improved economic growth is good and needed, how does that compare to overall pre-pandemic levels?

But maybe a more realistic question is "what is a realistic level of improvement that can be expected in the current global pandemic"? How much can the economy really recover during the pandemic?

It would be unrealistic for any economy to return to pre-pandemic levels but how close can an economy get to during the pandemic.

The pandemic has not affected all the different sectors the same. The tourism industry including the airline industry, in Japan and globally, has been hit the worst, So how much can these industries really recover and to what level that is acceptable for survival?

Article:

The economy shrank 8.2% in the April-June quarter; 0.6% in January-March and 1.8% in October-November 2019, according to Monday's data. Growth was flat in July-September 2019, underscoring stagnant conditions even before the pandemic.

"The Japanese economy for July-September 2020 is still in a severe situation due to the COVID-19, but it is showing movements of picking up later in the quarter," the government said in a statement.

The decline earlier this year was the worst the government had on record, at least since it began keeping comparable records in 1980. Japanese media reports characterized it as the worst since World War II.

Ideas and Commentary:

Yes the Japanese economy was not as good as expected in 2019, but, considering many economies globally, it was still in very good shape despite not having significant economic growth. If there had been no pandemic, perhaps the Japanese economy would have just remained in a "stagnant"mode for most of 2020. But to be fair and honest, hasn't this been the state of the Japanese economy for the past thirty years, not real significant growth, but always some kind of economic growth, even at just 1.0%. 

Article:

Junichi Makino, chief economist at SMBC Nikko Securities, said the GDP data reflect a halfway recovery that is expected to continue at a gradual pace.

"The driver of growth will shift to the service sector," Makino said in a recent report, stressing consumption growth in that sector tends to be moderate, compared to the consumption of goods.

"The momentum for growth on the macroeconomic level is therefore expected to slow down," he said.

Ideas and commentary:

The phrase "halfway recovery" sounds about right. But also terms such as minor recovery, slight recovery, minimal recovery may also be used to say the economy is growing at a very slow rate.

As economic activity continues to improve, it should be expected that the services sector should be the biggest part of an economy in the 21st century, and not manufacturing. 

But of course the consumption of good, in physical stores, for sure, has seen a major decrease, but at the same time, there are always positives and negatives in economic activity. While physical stores sales might be down, online sales might be up. 

Japanese businesses for sure, like everywhere, have had continued improvements in developing their online presence, and not just Japan Amazon or Rakuten.

Of course how about restaurants conbini places? How much improvement have they seen recently too?

Article:

Japan has never had a total lockdown but incoming tourism has largely vanished. Many stores and restaurants are still open, and schools and government offices are mostly running as usual, despite widespread efforts in the private sector for remote working. Some shopping districts are packed, although nearly everyone wears masks.

The administration of Prime Minister Yoshihide Suga has been trying to balance the need to curtail the infection's spread with keeping the economy going. That has prompted some criticism over policies such as the government's "GoTo campaign" of discounts for domestic travel that some believe may have caused surging cases in rural areas, such as on the northern main island of Hokkaido.

Japan has had fewer than 2,000 deaths related to COVID-19.

Some companies have sunk into losses, mostly those related to travel and exports. Others like Nintendo Co. have held up relatively well, as people staying home turn to video games.

Ideas and Commentary:

In every country in world there the challenge of trying to keep economies open as much as possible and at the same time trying to contain the virus situation. 

Japan it seems, until the last month or so, seems to have mastered the challenge better than some other countries. China and South Korea, and other Asian countries seem to be in better shape that others globally.

But, unfortunately, not all ares of an economy recover the same or even grow or improve the same. It may take a year or more for some industries to completely recover. There might be some complete transformations of some industries. Time will tell just what economies will look like in the future. 

Have a Nice Day and Be Safe!