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2010年11月22日 (月)

GDP拡大 見かけの高成長に気を許すな

The Yomiuri Shimbun (Nov. 22, 2010)
Govt must be vigilant over economic outlook
GDP拡大 見かけの高成長に気を許すな(11月21日付・読売社説)

The nation's economy has achieved moderate growth, but questions remain over its sustainability. The government must watch over the economy's propsects and remain vigilant for signs of deterioration.

The seasonally adjusted real gross domestic product rose 0.9 percent in July-September from the previous quarter--3.9 percent at an annualized rate--marking the fourth consecutive quarterly increase.

False dawn

Personal consumption, the main pillar of domestic demand, surged partly as a result of robust car sales ahead of the end of government subsidies for eco-friendly cars. In addition, the extremely hot summer weather boosted air conditioner sales.

However, these growth factors represented temporary special demand, meaning that the economy has yet to regain sustainable growth in domestic demand. It is also widely anticipated that the economy in the October-December quarter will contract due to factors including a sharp drop in consumer spending after the third-quarter surge.

Although the economic prospects may look bright as the Nikkei Stock Average has reattained the 10,000 level, we have to be vigilant. The government and Bank of Japan should take all possible measures to support the nation's economy.

The latest GDP data show that, in contrast to the temporary growth in domestic demand, there has been almost zero growth in external demand as a factor in Japan's economy. External demand has supported GDP growth in the past, but export growth has slowed due to the high value of the yen and the weakness of economies overseas.

In mid-September, the government and Bank of Japan engaged in market intervention for the first time in 6-1/2 years to stop the yen from surging, but appreciation pressure on the currency still remains. For now, it is impossible to wipe away concerns over a downturn in corporate performance, which has finally started to recover, in the latter half of the current fiscal year.

One good point about the rise in the yen is that people can buy imported goods at low prices, but we must keep in mind that it has side effects--falling prices could chill the economy and increase unemployment.

The government and Bank of Japan need to maintain a staunch stance against the yen's excessive appreciation.

The prospects for domestic demand, which looked strong in the July-September quarter, likely will become increasingly uncertain. Car sales in October dropped more than 20 percent from a year earlier, while cigarette sales plunged 70 percent due to the increased cigarette tax.

Because the number of eco points awarded for purchases of energy-saving home electrical appliances will be reduced in December, sales of flat-screen TVs and other electrical appliances are robust now, but this will not last long.

Swift action needed

To avoid a major drop in domestic demand, the government must have the supplementary budget pass the Diet quickly and also must accelerate emergency economic measures, including public works projects.

It is important for the government to build a foundation for private-sector-led growth while it is compensating for demand shortfalls with an adrenaline shot of fiscal spending.

However, internal debates over growth strategy have put the administration of Prime Minister Naoto Kan at cross-purposes with itself. It is likely that corporate tax cuts, the centerpiece of the strategy, will be realized only if the industrial sector shoulders additional burdens in the form of other taxes to generate alternative financial resources for the government. Needless to say, this would dampen the cuts' intended invigorating effect on companies.

Financial resources can be secured by stopping handout policies that have only slight economic effect. Kan should exercise leadership and switch policy priorities.

(From The Yomiuri Shimbun, Nov. 21, 2010)
(2010年11月21日01時20分  読売新聞)


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