Japan GDP Growth:

 Article Source: https://mainichi.jp/english/articles/20220908/p2g/00m/0bu/026000c

Article:

TOKYO (Kyodo) -- Japan's economy grew an annualized real 3.5 percent in the April-June period, faster than the previously reported 2.2 percent, the Cabinet Office said Thursday.

Real gross domestic product, adjusted for inflation, expanded 0.9 percent on a quarterly basis, revised upward from an earlier reading of 0.5 percent. GDP is the total value of goods and services produced in a country.

The figure, higher than the average market forecast of a 2.9 percent increase, confirmed the third straight quarter of growth and the return of the world's third-largest economy to a pre-pandemic size.

Ideas:

While GDP growth might have been a real 3.5 percent it probably doesn't explain the real economy situation in Japan.

GDP is not perfect measurement of what is really happening as an economy is very complex and there are always companies and sectors who are doing better that what is shown and those how are not doing so well.

The same can be said for the popluation overall, in that some might be doing really good and some or many might be just getting by especially because of the inflation situation.

It should not be said that the Japanese economy has reached the pre-pandemic level just yet, unless some might say the Japanese economy even before the pandemic was not doing too good, as evidenced in late 2019 and early 2020 when consumer spending was still not doing so good because of the October 2019 sales tax increased from eight to ten percent.

Article:

Economic activity picked up in the April-June period, helped by the removal of anti-virus curbs that had weighed on demand.

Capital spending increased 2.0 percent, larger than the initially reported 1.4 percent, as a decline in COVID-19 cases has helped reduce uncertainty, prompting companies to step up investments.

Private consumption, which accounts for more than half of the economy, rose 1.2 percent, compared with 1.1 percent in the preliminary data.

Ideas:

Japan is still the 3rd largest economy in the world so even a 2.0 percent increase is a lot for Japan. 

But as inflation and the weak yen continue to cause challenges for the Japanese economy it remains to be seen if the business investment can be sustained for the long term.

Private consumption or consumer spending has always been the weak link for the Japanese economy even though its estimated to be more than half of GDP or half of the economy.

Private consumption might have increased 1.2 percent but also like business investment is it sustainable in the long term as the weak yen and continued inflation are definite challenges for the Japanese economy.

Not to be forgotten is the idea that many workers have not had a real wage increase for a very long time which means their purchasing power is becoming less each month as prices continue to increase which means they have less disposable income for extra spending in the economy.

Article:

Economists expect growth to continue in the coming quarters though at a slower pace, but a recent surge of coronavirus infections and higher inflation are clouding the outlook for the current quarter to September, even as the government is considering an additional relief package to soften the blow to consumers.

Unadjusted for inflation, nominal GDP grew at a revised, annualized rate of 2.5 percent in the reporting quarter, instead of 1.1 percent.

Ideas:

Economic growth, any growth, is still good even at a slow pace. as there are many challenges that can slow down or even cause growth to decline such as the weak yen, increased energy prices, increased raw material prices, and the decreasing purchasing power of consumers.

If the Japanese government is going to do some kind of relief package it has to be big enough to help as many families as possible. It it can be just a one-time 50,000 yen handout, as it needs to sustainable for the long-term as much as possible.

If companies are not going to do their part and increase wages then the government needs to step-in with some kind of program for the remainder of the inflation situation to help families and those who are not doing so good.

Japanese consumers have not seen or experienced this much inflation for a very long time, s maybe not since the boom times of the 1980's. So many, with no or little wage increases might not be doing too good right now.

And if your are a contract worker, part-time worker, on a fixed income it becomes even more challenging.
Have a nice day and be safe!