Japan Economy: Ideas Later.

Japan economy may surpass 73-month postwar growth record in July

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TOKYO (Kyodo) -- The Japanese government is likely to maintain its view that the economy is recovering moderately in its monthly assessment for July, a source close to the matter said Thursday, raising the possibility that the economy will surpass the postwar record of 73 consecutive months of expansion.

But even if it is later confirmed that the previous record expansion seen between February 2002 and February 2008 has been exceeded, the achievement will come as households continue to struggle with a rising cost of living.

The final determination of the length of the current economic expansion will be made retrospectively by a Cabinet Office panel of economists and other experts.

The economy has continued to expand since hitting bottom in May 2020 due to the novel coronavirus pandemic, with gross domestic product growth remaining in positive territory even when Japan was hit by the fallout from Russia's invasion of Ukraine and the higher tariffs policy of the administration of U.S. President Donald Trump.

Nevertheless, in the first economic and fiscal policy guidelines approved by the Cabinet of Prime Minister Sanae Takaichi on Tuesday, the government acknowledged the need to make sure that "everyone across Japan can really feel that 'the economy is getting better.'"

In maintaining the economic assessment for July, the government said that personal consumption, which comprises around half of GDP, is solid, supported by recent wage hikes and the government's subsidies to tackle inflation, the source said.

Capital investment by businesses and industrial output have also been robust due to the spread of artificial intelligence, while exports are solid due to strong demand for autos in the United States, the source said.

When asked about the possibility of the Japanese economy surpassing the postwar growth record at a press conference in June, Minoru Kiuchi, Japan's minister for economic and fiscal policy, simply said that it would take "some time to gather the data needed for verification and have discussions about it."

A Cabinet Office source, meanwhile, said, "It is hard to be genuinely happy at a time when it is uncertain whether inflation-adjusted real wages will keep rising and the situation in the Middle East is still uncertain."

Article source:  https://mainichi.jp/english/articles/20260723/p2g/00m/0bu/018000c