Signs of Life In Ja­panese Econ­omy


Ja­pan’s eco­nomic en­gine may not be roar­ing, but there is a def­i­nite hum. The econ­omy grew for a fifth con­sec­u­tive quar­ter at the start of 2017, the long­est stretch of growth in more than a decade. Prime Min­is­ter Shinzo Abe’s gov­ern­ment has been try­ing for four and a half years to coax the econ­omy into a higher gear. Al­though Ja­pan’s out­put is still the world’s third-largest, af­ter the United States and China, con­sis­tent growth has been elu­sive. Ja­panese gross do­mes­tic prod­uct in­creased by 2.2 per­cent in an­nu­al­ized terms in the three months through March, the gov­ern­ment said on Thurs­day. The econ­omy has now been ex­pand­ing for a longer pe­riod than at any time since 2005-6. The pace also ac­cel­er­ated from the pre­vi­ous quar­ter, and was stronger than econ­o­mists had ex­pected. Ex­ports have been lift­ing out­put since the start of the ex­pan­sion, and they did so again last quar­ter. A broadly re­cov­er­ing global econ­omy is help­ing, as is a weaker yen, which makes Ja­panese goods more af­ford­able abroad. The do­mes­tic side of the econ­omy has been shakier, with spend­ing by con­sumers and busi­nesses mostly weak and in­con­sis­tent. But in the lat­est quar­ter, con­sump­tion and busi­ness in­vest­ment both rose. But a cru­cial in­gre­di­ent is miss­ing: in­fla­tion. The big idea be­hind “Abe­nomics,” as Mr. Abe’s strat­egy is known, was to en­gi­neer a rise in con­sumer prices, which would lift cor­po­rate prof­its and work­ers’ pay. That, the gov­ern­ment said, would make the econ­omy grow faster and more con­sis­tently. Prices have barely budged, how­ever, leav­ing many econ­o­mists spec­u­lat­ing that the cur­rent streak will fade.

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