Japan's economy expands 1.8% in Jan.-March, revised down
Ideas
Annualized growth, while good, is not growth the entire year as its just a projection of what might happen if all things considered remain the same, which it usually doesn't in an economy as other factors can cause both positive and negative growth the rest of the year.
And yes, the situation in the Middle East is exactly one example of factors can influence economic growth and it might well slow down growth even more than expected as global supply chains will most likely be compromised for a while.
The Japanese economy is very mature economy and as such is not going to see the same growth that an India or China will as emerging economies still have a lot of economic growth to do before the reach the mature stage.
But at the same time, even mature economies, as big a Japan can still see significant growth over an entire year period.
Also even though GDP growth might be less there is still a significant amount of economic activity in the Japanese economy.
For the most part, Japan is not a major software developing economy as it has always focused the hardware side of things even though they might be trying to gain some ground in the software side of things.
You really know exactly what companies are thinking as capital spending could be a window into how companies feel but at the same time, maybe not as some companies always invest and spend while some companies do they little or only when they feel they need to.
Public investment or government spending in Japan seems to always be a priority as they are always spending on something even though they know the government is heavily in debt.
However, private consumption or consumer spending is always a challenge as it never seems to be enough to product any real economic growth, even though there are spending spurts or other there but again never enough overall.
And then there is housing, which seems to be a major global challenge as housing prices have just become too expensive in most advanced countries these days.
Japan is still a major export economy and its economy is now highly dependent more on exports than what the overall domestic economy can produce these days.
Import most likely were down only because the Japanese yen became a little stronger which meant import prices, overall, were a little less expensive.
An increase or decrease of the GDP at 0.1 percent is not much anything as it's a blip on the radar and nothing more and really doesn't amount to anything that should really be considered.
Yes, for the most part, global supplies chains, potentially, are going to be significantly compromises and some if not all economies are going to be affected one way or another in the April-June quarter.
The problem for Japan is its a resource-poor country which means it has to import much of what it needs and as a result any slight disruption in the global supply chains can turn into a significant challenge for importers trying to get whatever to Jap
It seems, good or not so good, the Japanese government is always willing to spend, as needed to help the economy and or to make themselves look good for the public.
In this case yes, the Middle East situation is going to increase inflation and increase the price of oil and gas in Japan and everywhere else, and its good, for the average Japanese households that they are giving more relief so that maybe their disposable incomes don't decrease too much so they can spend in some of it in the economy.
The nominal GDP is not what is important in an economy as real GDP is what matters as nominal GDP is GDP plus inflation. While it looks good in terms of it being more, in reality it just shows how much inflation has increased overall in an economy.
Have a nice day!
Article source: https://mainichi.jp/english/articles/20260608/p2g/00m/0bu/008000c
