GDP grows 2.4% on annualized basis
The Yomiuri Shimbun
8:17 pm, May 20, 2015
The Yomiuri Shimbun The nation’s gross domestic product in the January-March quarter rose 0.6 percent from the previous quarter in price-adjusted real terms, marking growth for two quarters in a row, according to the preliminary figures released by the Cabinet Office on Wednesday.
On an annualized basis, the GDP increased 2.4 percent during the period — exceeding the “less than 2 percent level” forecast by major private research institutes.
The GDP increase was aided by stable individual consumption and positive growth of residential investment and capital investment.
The annualized growth rate follows the one for the same quarter a year before, which was a 4.9 percent rise.
Personal spending — accounting for 60 percent of the GDP — increased 0.4 percent, showing positive growth for three consecutive quarters.
Residential investment rose 1.8 percent after negative growth for three quarters in a row, marking the first positive growth after the consumption tax hike from 5 percent to 8 percent in April last year. The figure showed recovery from the steep reduction in home investment after last-minute home purchases before the tax hike.
At a press conference Wednesday, Economic Revitalization Minister Akira Amari said: “Private-sector demand, including individual consumption and residential investment, is seeing positive growth overall. That was a favorable result.”
However, public-sector investment fell 1.4 percent, the first decline in five quarters. Net exports — the balance of exports and imports — logged a 0.2 percent decline.
Nominal GDP, which is thought to be closer to consumers’ sentiment in their everyday lives, rose 1.9 percent, with the annualized growth rate standing at 7.7 percent. The annualized figure is second to that for the July-September 2011 period.
Meanwhile, the real GDP for fiscal 2014 decreased 1 percent from the previous fiscal year. This is the first decline since the 2 percent decline for fiscal 2009, which was affected by the 2008 collapse of Lehman Brothers. In fiscal 2014, personal spending dropped 3.1 percent and housing investment plunged 11.6 percent due to the consumption tax hike.
More strategy needed
Japan’s economy is heading toward recovery, as reflected in this year’s preliminary GDP figures for the January-March period.
But the individual consumption growth rate was unchanged from that of the previous quarter. Given that the GDP increase is mainly attributed to the expansion of off-the-shelf stock, the pace of recovery still lacks momentum.
Crude oil prices have fallen, but prices went up for many food items and other products this year. Consumer confidence has also remained lower than expected.
Record-high earnings were reported for fiscal 2014 that ended in March by many companies, most of them manufacturers, while corporate capital investment resulted in positive growth. But to this end, corporations were slow to react.
At a press conference that day, Economic Revitalization Minister Akira Amari expressed the government’s plan to urge firms to invest, saying, “Capital spending has remained weak. We’ll give a push [to corporate managers].”
In light of the weakening yen in recent months, many firms have decided to move their production bases back to Japan — but plenty of others have opted to increase overseas investments.
A fresh growth strategy is needed if the government hopes to achieve a full economic recovery led by the private sector
GDP grows 2.4% on annualized basis - The Japan News
The Yomiuri Shimbun
8:17 pm, May 20, 2015
The Yomiuri Shimbun The nation’s gross domestic product in the January-March quarter rose 0.6 percent from the previous quarter in price-adjusted real terms, marking growth for two quarters in a row, according to the preliminary figures released by the Cabinet Office on Wednesday.
On an annualized basis, the GDP increased 2.4 percent during the period — exceeding the “less than 2 percent level” forecast by major private research institutes.
The GDP increase was aided by stable individual consumption and positive growth of residential investment and capital investment.
The annualized growth rate follows the one for the same quarter a year before, which was a 4.9 percent rise.
Personal spending — accounting for 60 percent of the GDP — increased 0.4 percent, showing positive growth for three consecutive quarters.
Residential investment rose 1.8 percent after negative growth for three quarters in a row, marking the first positive growth after the consumption tax hike from 5 percent to 8 percent in April last year. The figure showed recovery from the steep reduction in home investment after last-minute home purchases before the tax hike.
At a press conference Wednesday, Economic Revitalization Minister Akira Amari said: “Private-sector demand, including individual consumption and residential investment, is seeing positive growth overall. That was a favorable result.”
However, public-sector investment fell 1.4 percent, the first decline in five quarters. Net exports — the balance of exports and imports — logged a 0.2 percent decline.
Nominal GDP, which is thought to be closer to consumers’ sentiment in their everyday lives, rose 1.9 percent, with the annualized growth rate standing at 7.7 percent. The annualized figure is second to that for the July-September 2011 period.
Meanwhile, the real GDP for fiscal 2014 decreased 1 percent from the previous fiscal year. This is the first decline since the 2 percent decline for fiscal 2009, which was affected by the 2008 collapse of Lehman Brothers. In fiscal 2014, personal spending dropped 3.1 percent and housing investment plunged 11.6 percent due to the consumption tax hike.
More strategy needed
Japan’s economy is heading toward recovery, as reflected in this year’s preliminary GDP figures for the January-March period.
But the individual consumption growth rate was unchanged from that of the previous quarter. Given that the GDP increase is mainly attributed to the expansion of off-the-shelf stock, the pace of recovery still lacks momentum.
Crude oil prices have fallen, but prices went up for many food items and other products this year. Consumer confidence has also remained lower than expected.
Record-high earnings were reported for fiscal 2014 that ended in March by many companies, most of them manufacturers, while corporate capital investment resulted in positive growth. But to this end, corporations were slow to react.
At a press conference that day, Economic Revitalization Minister Akira Amari expressed the government’s plan to urge firms to invest, saying, “Capital spending has remained weak. We’ll give a push [to corporate managers].”
In light of the weakening yen in recent months, many firms have decided to move their production bases back to Japan — but plenty of others have opted to increase overseas investments.
A fresh growth strategy is needed if the government hopes to achieve a full economic recovery led by the private sector
GDP grows 2.4% on annualized basis - The Japan News