Global| Aug 12 2008Japan's GDP Slows and Contracts
Summary
Officials in Japan have become more worried in recent weeks even saying that they cannot be sure that the economy is not now in recession. It’s GDP for 2008-Q2 tells that story. GDP is declining at a weak 2.4% pace in Q2 (Saar). The [...]
Officials in Japan have become more worried in recent weeks
even saying that they cannot be sure that the economy is not now in
recession. It’s GDP for 2008-Q2 tells that story. GDP is declining at a
weak 2.4% pace in Q2 (Saar). The Yr/Yr pace of GDP growth has slowed
from an already weak 1.4% in 2007-Q4 to 1.2% in 2008-Q1 and now to 1.0%
in 2008-Q2.
Private consumption is falling at a 1.9% pace. Gross fixed
capital formation is falling at a 6% rate. The investment rate for
capital equipment is -0.9% and for housing it’s a very weak -13%. Trade
is making a small subtraction from overall growth as imports are
dropping at better than a 10% rate as exports are falling at a nearly
9% ate. That results in a GDP subtraction because exports are so much
larger than imports in real terms than the smaller percentage decline
in exports is still a larger drop in real terms than the drop in
imports.
Moreover, domestic demand in Japan is falling at a 2.5% annual
rate in 2008-Q2 and is falling year/year for the second quarter in a
row. No wonder Japan’s authorities are concerned and stimulus package
is being prepared.
| Japan GDP | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Consumption | Capital Formation | Trade | Domestic | |||||||
| GDP | Private | Public | Gross Fix Capital |
Plants &Eqpt |
Housing | X-M: lbns E |
Exports | Imports | Demand | |
| % change Q/Q at annual rates of change; X-M is Q/Q change in Bil Real Yen | ||||||||||
| Q2-08 | -2.4% | -1.9% | 0.3% | -6.0% | -0.9% | -13.0% | -0.4 | -8.9% | -10.7% | -2.5% |
| Q1-08 | 3.2% | 2.8% | -1.8% | 2.8% | -0.2% | 18.2% | 2.4 | 14.4% | 4.8% | 1.4% |
| Q4-07 | 2.4% | 1.4% | 3.4% | -2.5% | 4.3% | -33.8% | 1.9 | 11.1% | 3.3% | 1.0% |
| Q3-07 | 1.0% | 0.0% | 0.3% | -4.2% | 2.3% | -26.3% | 2.5 | 11.0% | -1.2% | -1.0% |
| % change Yr/Yr; X-M is Yr/Yr change in Gap in Bil Real Yen | ||||||||||
| Q2-08 | 1.0% | 0.5% | 0.5% | -2.6% | 1.3% | -15.8% | 6.3 | 6.5% | -1.2% | -0.3% |
| Q1-08 | 1.2% | 1.3% | 0.7% | -3.6% | -0.6% | -16.6% | 7.6 | 11.0% | 2.9% | -0.2% |
| Q4-07 | 1.4% | 1.2% | 1.4% | -3.8% | -0.2% | -21.5% | 7.2 | 10.4% | 2.3% | 0.0% |
| Q3-07 | 1.8% | 1.8% | 0.2% | -1.4% | 0.4% | -11.3% | 6.0 | 8.5% | 1.5% | 0.6% |
| 5-Yrs | 2.0% | 1.5% | 0.8% | 0.5% | 4.4% | -4.0% | na | 9.4% | 4.3% | 1.2% |
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
