Japan is out of crisis
Compared with the third quarter, GDP rose 0.6% last 3 months, but still lower than expected 0.9%. Earlier, Japan had negative growth 2 consecutive quarters due to the impact of the consumption tax hike in April, causing reduced spending.
However, data shows that the recovery in Japan is still fragile, while consumer confidence remains weak, despite Prime Minister Shinzo Abe has postponed the 2nd round of tax increase is expected in October this year. Private consumption, which contributed 60% of GDP, rose 0.3% last quarter, lower than the 0.7% forecast by economists.
After two consecutive quarters of negative growth, Japan has rebounded and Japan is out of crisis . Photo: AFP
On the BBC, Glenn Levine – a senior economist at Moody’s Analytics, said exporters were “significant contribution” to GDP, while accounting for 50% growth. Meanwhile, most of the field still remains bleak. Exports rose 2.7% from the fourth quarter to the third quarter. Imports rose 1.3%.
Composition of the most disappointing Japanese GDP is invested enterprises. “The company had record profits thanks to the yen weak. They are sitting on mountains of cash. But very few companies willing to invest in banking and manufacturing,” Levine said. This is the “trust issues”, as the company does not believe the domestic economy is improving.
Japan’s growth weaker than expected despite a series of stimulus measures have been announced. In May 12, the government approved $ 29 billion hit to help businesses and consumers.
However, the market has reacted positively to GDP data. Nikkei 225 stock index was up 18,047 points in the morning session, the highest since January 7/2007.