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2015年8月19日 (水)

(社説)マイナス成長 危うい政策目標と想定

--The Asahi Shimbun, Aug. 18
EDITORIAL: Dismal GDP data highlights need to review policy targets
(社説)マイナス成長 危うい政策目標と想定

Japan’s economy shrank during the three months from April through June, its first decline in three quarters. The nation’s real gross domestic product--the value of total economic output adjusted for price changes--fell 0.4 percent during the quarter from the previous three months, according to preliminary data released Aug. 17 by the Cabinet Office. At this rate, the size of economic contraction will reach 1.6 percent on an annualized basis.

Consumer spending dropped in spite expectations of continued recovery. That is because a weaker yen triggered increases in the prices of food and other daily products while wage growth was weaker than expected. This only added to the financial burden on households.

Exports declined for the first time in six quarters, even though they were expected to grow due to the effects of a weaker yen that makes Japanese products cheaper in overseas markets.

The consensus view was that the economy had been recovering gradually since the consumption tax rate increase in April last year, which depressed consumer spending.

The fall in GDP was not caused by any specific factor that delivered a body blow to the economy.

Rather, overall economic conditions were relatively good during the period.

Corporate earnings improved further and the stock market rebounded.

Job growth was strong.

A surge of foreign visitors to Japan was a big boon to related businesses.

The Bank of Japan continued its aggressive monetary easing, while public works spending remained at a high level.

The contraction in the April-June quarter offers some important clues to what's going on in the Japanese economy.
Despite this favorable environment, the economy failed to expand.

And yes, there was some destabilizing factors in the world economy.

In Europe, the debt crisis in Greece caused serious confusion. China’s economic slowdown became more pronounced.

But these external factors are not temporary in nature. We should probably assume that instability in the global economy will continue for a while.

If so, it is hard to expect a dramatic rise in exports or a further sharp increase in spending in Japan by foreign tourists in the coming months. In short, we should not place too much hope on growth in external demand.

In its policy efforts to restore fiscal sanity, the government is pursuing a target of a primary surplus--a situation where government tax revenue exceeds all its spending other than net interest--in fiscal 2020.

In setting the target, however, the government assumed that the economy would pull off a strong real growth of 2 percent and expand by 3 percent in nominal terms.

A tough-minded analysis of Japan’s economic reality behind its negative growth during the April-June period, however, makes clear that it is risky to bet on any significant economic expansion in planning and executing policy measures to dig the nation out of a budget hole that is driving accumulated debt to dangerous levels.

The latest GDP data also offers valuable reference information for the Bank of Japan, which has continued to provide huge monetary stimulus to the economy with an eye to achieving an inflation target of 2 percent.

The central bank started the radical monetary expansion campaign on the assumption that consumers will ramp up their spending when they expect prices to rise. Increased consumer spending then should bolster economic growth by pushing up overall domestic demand, according to the BOJ’s scenario.

But Japanese consumers have not behaved as the BOJ expected. It has become increasingly clear that the central bank’s monetary policy is not working.

The latest economic data points to the need for both the government and the BOJ to revise their growth and inflation projections so they are more in line with the reality and then readjust their economic strategy and monetary policy accordingly.


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