Posts Tagged ‘Economy of Japan’

Japan back to growth with a bang with GDP up 1.5% in 3 months

November 14, 2011

I have faith in Japanese resilience and will still stick my neck out and stay with my forecast that the Japanese economy  will become a global “driver” through 2012 and 2013.

Japanese Gross Domestic Product grew by 1.5 % over the 3rd quarter (July – September) representing an annualized growth rate of 6 percent. This is the fastest rate of growth for 18 months.  The Cabinet Office said today in Tokyo that at 543 trillion yen ($7 trillion), the economic output was back to levels last seen before the March 11th  Great Tohoku quake and tsunami.

The growth seems to have been led by exports rather than the domestic impetus measures to recover from the earthquake or the subsequent spending on rebuilding infrastructure. These probably need 2 more quarters to kick-in but that  means that this growth is still vulnerable to current global weaknesses.

However the optimistic “glass half full” view would be that Japanese exports have grown mainly to Asia and the earthquake rebound  has yet to come. Moreover this has happened in spite of a very high Yen. Any recovery in Europe and N. America would be a further boost to an economy which is large enough to then act as a global motor.

NY Times: 

The rebound underscores the speed at which Japanese industry has been able to get back on its feet after the March 11 earthquake and tsunami, rebuilding factories and re-establishing supply chains severed by the destruction.

Exports jumped 6.2 percent as manufacturers got production back on track. Private consumption, which accounts for almost two-thirds of Japan’s economy, grew 1 percent, helped by a rebound in consumer sentiment and replacement demand in the tsunami zone.

Still, policy makers and economists also worry that the punishingly strong yen of recent months as well as weak growth in major trading partners, like the United States and China, will take a toll on Japanese exports. The crisis at the Fukushima Daiichi nuclear plant, meanwhile, has thrown the country’s energy policy into disarray and cast a pall over Japan’s recovery.

Related: Could the disaster in Japan power a wave of sustainable growth? 

 

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