Japan's April-June GDP growth revised down to annualized real 2.9%
Ideas:
There are always going to be revisions as new data comes to light, so going from 3.1 to 2.9 is not that much of a real different in what happened in the Japanese economy.
An annualized growth means if the economy stayed the same it would grow that much, but economies, especially the Japanese economy, is never the same from quarter to quarter.
Private consumption or consumer spending is never where is should be in Japan, as the average Japanese household just doesn't spend like the US household or maybe even the EU household.
Capital spending by companies is often based on what they feel about the future of the economy, and most likely the average Japanese company might be a little weary about the future of the Japanese economy.
GDP, especially Japan's GDP is never where it should be and hasn't been there for a very long. Most advanced economies don't grow that much, except for the US economy, as even a 0.7 percent or even 0.8 percent, while low, is about the norm these days for the Japanese economy.
Even capital investment, at 0.9 or 0.8 percent is still low, but the norm for the Japanese economy, as it seems it just doesn't grow that much.
Japan has the 4th largest economy in the world, so even at 0.7 or 0.8 its still growing but of course at a much lower rate.
Private consumption or consumer spending is never where it should be in Japan, as Japanese consumers just aren't the big spenders like US consumers.
Japanese consumers, due to inflation, the hot weather, or other factors, are cutting back or just waiting for the summer heat to change and they will get back outside and go to different places.
The Japanese economy might be recovering at a moderate pace, but, as usual, the Bank of Japan uses the same phrase over and over to describe the Japanese economy.
The Bank of Japan, most likely, is not going to increase its key rate anytime, but it might do it in late October or early November, as it wants to see how the Japanese economy is continuing to improve and if the financial markets are stable, after some rocky times during early August.
Yes, the Japanese economy might be recovering moderately, but that is about as positive and the Bank of Japan or others might say, as there is much chance or a sudden shift or explosion of growth in the economy.
Sluggish spending, during the current summer months, might be due to the extreme heat in Japan at this time, as anytime the temperature gets above 35 C consumers refrain from spending, as it just too hot to go out and do things.
And yes, as its the typhoon season in Japan, it might delay or cause some families to refrain from traveling in Japan. And then add in the government advisory about the potential earthquake situation, more travelers might have changed plans about traveling.
Yes, growth in real wages, due to the wage increases in April might help some with consumer spending, but so far, there hasn't been a big surge in spending, as again, the summer heat and the typhoon season, might be limiting some consumer spending in Japan.
Exports in Japan is a major economic driver, as even though services are the biggest part of the Japanese economy, Japanese exports are still a key economic driver, which increases economic growth.
The Japanese car scandal related to testing irregularities seems to have passed as the Japanese auto industry seems to be back on track to help grow the Japanese economy.
Nominal GDP is really not that important as real GDP is really what drives and economy, as nominal is just but GDP and inflation.
And the same with nominal GDP, as it includes inflation, as inflation continues to be a major factor in the Japanese economy since the pandemic.
Finally, the Japanese economy, while a very stable in economy, just doesn't grow that much, but that just might be the nature of advanced economies globally as they don't grow that much, as even a 0.8 or 0.9 that might be all the Japanese economy is going to do for a while, until maybe there is a major paradigm shift in economic growth.
Have a nice day!
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.