Japan: growth revised upwards and current account improves. All without restrictive monetary policy
Japan amazes with a monetary policy that will not please the most austere European countries, but which works. First of all, growth has been better than previously thought.
Japan's economy advanced 0.7% in Q1 2023, compared to the flash reading of a 0.4% expansion and after an upwardly revised 0.1% rise in the prior period, beating forecasts of the market by a gain of 0.5%.
It was the second consecutive quarter of economic growth and the fastest pace since the second quarter of 2022, as private consumption increased to its highest level in three quarters after the complete abolition of strict border controls (0.5%, compared to 0.6% flash data and after a 0.2% gain in the fourth quarter).
Furthermore, there was an upward revision of both capital expenditure (1.4%, compared to preliminary data and the fourth quarter figure of 0.9%, exceeding the estimates of 1.3%) and public (0.1%, versus the flat reading of initial projections and after a 0.2% increase in the fourth quarter).
Meanwhile, net trade was a negative contributor, as exports (-4.2% vs. 2.0%) fell more than imports (-2.3% vs. flat reading). The economy expanded by 1.1% last year, slowing from a 2.1% increase in 2021 due to persistent global headwinds. Here is the related graph
This growth saw an improvement in the current account in April, a sign that in any case the drop in exports was then corrected, demonstrating the good vitality of Tokyo's economy. Japan's current account surplus jumped to JPY 1,895.1 trillion in April 2023 from JPY 1,075.1 trillion in the same month a year earlier.
It was the third consecutive month of a current account surplus, exceeding market estimates for a gain of JPY 1,663.8 billion, as the primary income surplus widened to JPY 3,066.3 billion from 2,974, 2 billion JPY from the previous year. At the same time, the goods account deficit narrowed to JPY 113.1.4 billion from JPY 684.1 billion, with exports up 2.6% year on year and imports down 4%. ,1%.
Furthermore, the gap in the services bill narrowed to JPY 646.5 billion from JPY 1,002.8 billion a year ago. Meanwhile, the secondary income deficit widened to JPY 411.1 billion from JPY 212.2 billion.
So the Japanese economy is vital, despite the big problems associated with democracy and an economy that is more than mature. On the contrary, Japanese exports prove to be particularly competitive on a global level, while China, which produces more mass goods, sees a slowdown in foreign trade. All without a restrictive monetary policy like the one applied by the ECB.
Japan is an example of how a practical and sound economic policy can still lead a country on a path of slow but steady growth.
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The article Japan: growth revised upwards and current account improves. All without restrictive monetary policy comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/giappone-crescita-rivista-al-rialzo-e-migliorano-le-partite-correnti-il-tutto-senza-politica-monetaria-restrittiva/ on Thu, 08 Jun 2023 11:44:08 +0000.