Recent Economic Developments

Transcription

1 Recent Economic Developments September 26, 218 Cabinet Office Government of Japan Contact for inquiries: Directorate General for Economic Research

2 <Assessments of the current state of the Japanese economy> June July (Unchanged) August (Unchanged) September (Unchanged) 1

3 <Assessments of the current state of the Japanese economy> June July August September Private consumption Private consumption is picking up. Unchanged Unchanged Unchanged Business investment Business investment is increasing moderately. Unchanged Unchanged Business investment is increasing. ( ) Exports Exports are picking up. Unchanged Exports are pausing recently.( ) Unchanged Industrial production Industrial production is increasing moderately. Unchanged Unchanged Unchanged Corporate profits Corporate profits are improving. Unchanged Unchanged Unchanged Firms judgments on business conditions Firms judgments on current business conditions are improving. Firms' judgments on current business conditions are almost flat.( ) Unchanged Unchanged The employment situation The employment situation is improving steadily. Unchanged Unchanged Unchanged Prices Consumer prices are rising moderately in recent months. Unchanged Consumer prices are rising at a slower tempo recently. Unchanged Note: denotes upward revision and denotes downward revision. 2

4 <Short-term prospects> June July (Changed) August (Changed) September (Changed) 3

5 (September) <Policy stance> The Government will make its utmost efforts to ensure the economy overcomes deflation and achieve economic revitalization and fiscal consolidation simultaneously, in addition to make effort toward the reconstruction and revitalization from the Great East Japan Earthquake and the restoration and reconstruction from the 216 Kumamoto Earthquake. To this end, the Government steadily implements the "Basic Policies for Economic and Fiscal Management and Reform 218", the "Growth Strategy 218", the "Regulatory Reform Work Plan", the "Basic Policies for Overcoming Population Decline and Vitalizing Local Economy in Japan 218", and the "Japan's Plan for the Dynamic Engagement of All Citizens". Moreover, in order to tackle the enormous challenge of the declining birthrate and aging population by promoting Supply System Innovation and Human Resources Development Revolution as two wheels of a cart, the Government will steadily implements the "New Economic Policy Package" and the "Basic Design for Human Resources Development Revolution". And the Government will smoothly enforce the Act on Arrangement of Relevant Act on Promoting the Work Style Reform. In addition, the Government implements the FY217 supplementary budget and the FY218 budget swiftly and steadily. The Government will exert every effort for the provision of support for the daily lives of those affected by the successive natural disasters and the restoration and reconstruction of the affected areas. The Government continuously pursues to expand the economic virtuous cycles which cover local areas, SMEs and small-scale businesses, through directing growing corporate profits towards investment, wage increase and further improvement in the employment situation. The Government expects the Bank of Japan to achieve the price stability target of two percent in light of economic activity and prices. 4

6 GDP: Apr. Jun. 218 (Second Preliminary) Changes and contributions to changes in real GDP (seasonally adjusted) % FY216 FY217 Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Apr. - Jun. Jul. - Sep. Oct. - Dec. Jan. - Mar. Apr. - Jun. Real GDP growth rate [at annual rate] [2.] [2.3] [.9] [-.9] [3.] Domestic Demand (.4) (1.2) (.8) (.) (.4) (-.3) (.9) (Contributions) Private Demand (.3) (1.) (.4) (.1) (.4) (-.3) (.8) (Contributions) Private Consumption Private Non-Resi Investment Private Residential Investment Changes in Private Inventories (-.3) (.1) (-.1) (.4) (.2) (-.2) (.) (Contributions) Public Demand (Contributions) (.1) (.2) (.3) (-.1) (-.) (-.) (.) Public Investment Net Exports (Contributions) (.8) (.4) (-.3) (.6) (-.1) (.1) (-.1) Exports Imports s.a., ann., tril. yen Nominal and real GDP Nominal GDP 553 tril. Yen (Apr. - Jun. 218) Record High Real GDP 538 tril. yen (Apr.- Jun. 218) Nominal GDP growth rate ⅠⅢⅠⅢⅠⅢⅠⅢⅠⅢⅠⅢⅠⅢⅠⅢⅠⅢⅠⅢⅠⅢⅠⅢⅠⅡ quarter Source: Cabinet Office

7 Economic Expansion Period s.a., 21=1 Index of business conditions /6 Peak 1986/11 Trough 1991/2 Peak 1993/1 Trough 1997/5 Peak 1999/1 Trough 2/11 Peak 22/1 Trough 28/2 Peak 29/3 Trough 212/3 Peak 212/11 Trough th cycle 11th cycle 12th cycle 13th cycle 14th cycle 15th cycle Note: Shaded areas indicate recession periods. Rank of the length of the expansion period Rank Period 1 73 months 22 Feb. 28 Feb months 1965 Nov. 197 Jul., Izanagi 3 51 months 1986 Dec Feb., Bubble This time 7 months 212 Dec. ああああああああ 6

8 Business Investment 95 9 Business investment in nominal GDP s.a., ann., tril.yen 88.2 tril. yen (Oct.-Dec. 1997) 91.5 tril.yen (Apr.-Jun. 218) Composition and growth of business investment (FY218 Plan) Paper & pulp 51.6% <Manufacturing> Non-ferrous metals 37.9% Precision machinery 3.4% Manufacturing average 27.2% Food & beverages 27.9% Iron & steel 5.2% Electric machinery 34.1% Chemicals 29.3% Transport equipment 28.8% General machinery 21.7% Other 28.9% Share in manufacturing, % Wholesale & retail 26.2% <Non-manufacturing> Non-manufacturing average 18.5% Services 23.8% Construction 16.3% Telecommunications & information 4.3% Real estate 26.5% Transportation 26.2% Other 11.5% Source: Cabinet Office. Source: Development Bank of Japan. Share in non-manufacturing, % 7

9 Effects of trade conflicts between the United States and China Export of China Real GDP growth of China Value of Exports(217):2.3 trillion US$ 15 Quarterly South Korea 5% Japan 6% Others 29% Hong Kong 12% USA 19% ASEAN 12% EU 17% Electrical Machinery & Equipment, etc. (mobile 26.3% phone, etc.) Machinery & Mechanical Appliance, etc. (computer, 16.8% etc.) Textile & Textile Article 11.3% Base Metal & Article of Base Metal (Steel products, 7.3% Aluminium, etc.) Furniture, Toy, etc. 7.1% Chemical or Allied Industry 5.% Product Final Consumption Expenditures GDP Growth rate 217 Q2 6.7% Import of China 5 Value of Imports(217):1.8 trillion US$ 3 Others 38% USA 8% EU 13% Taiwan 9% Japan 9% ASEAN 13% South Korea 1% Source: General Administration of Customs, China. Electrical Machinery & Equipment, etc. (IC, etc.) Mineral Product (Crude Petroleum Oil, etc.) Machinery & Mechanical Appliance, etc. (Industrial machinery, etc.) Chemical or Allied Industry Product (Medical & Pharmaceutical Product, etc.) 24.8% 2.5% 9.2% 7.2% Vehicle, Aircraft, Vessel, etc. 5.9% Optical Instrument & Apparatus, etc. Base Metal & Article of Base Metal (Copper, Steel product, etc.) 5.5% 5.2% Gross Capital Formation Net Exports Ⅰ Ⅱ 18 Source: National Bureau of Statistics, China. quarter 8

10 Natural Disasters since June 218 As of Sep. 25 Hokkaido Eastern Iburi Earthquake, Sep. 6 New Chitose Airport: Terminal works normally after Sep. 8. Hokkaido Shinkansen: Trains are operated normally after Sep. 7. Sapporo The Heavy Rain Event of July 218, Jun. 28 to Jul. 8 Airports work normally. Shinkansen: Trains are operated as usual. Local Railways: Operation has restarted in all sections in Okayama, Yamaguchi and Ehime Prefecture. Operation is being halted in some sections in Hiroshima Prefecture. Yamaguchi Pref. Hiroshima Pref. Okayama Pref. Northern Osaka Earthquake, Jun. 18 No effects on major transportation Tokyo Ehime Pref. Kansai International Airport (KIX) Osaka Typhoon Jebi (No.21), Sep. 4 Kansai International Airport (KIX): Operation restarted partially on Sep. 7. All runways reopened by Sep. 14. All passenger terminals reopened by Sep. 21. Railway services of the access bridge resumed on Sep.18. Shinkansen: Trains are operated normally since Sep. 5. 9

11 Private Consumption 11 s.a., 211=1 Synthetic consumption index (Real) 6 4 Travel 5 4 Eating-out Total Sales Number of Customers Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ 7 quarter /month -2 Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ 7 quarter /month Source: Railway Passenger Association. Source: Japan Food Service Association Daily sales of food, daily necessities MA (3 months moving average) month day month Source: Cabinet Office. Source: Nikkei CPI Now. 1

12 s.a., 215 = 1, 3MA MoM (3MA) Total Asia U.S. EU Jul..3%.2%.7% +1.3% U.S. Asia EU Total Source: Ministry of Finance. Exports volume index by region Exports, Industrial Production and Corporate Profits month s.a., 21 = 1, 3MA Production by industry IIP (Jul. 218) MoM(3MA) -.7% General-purpose, production and business oriented machinery (right scale) Transport equipment (right scale) s.a., 21 = 1, 3MA Electronic parts and devices (right scale) Forecast month Source: Ministry of Economy, Trade and Industry trillion yen Current account 9 trillion yen Current profits 3 2 Current account Goods Primary income Manufacturing Non-manufacturing Services Secondary income Sources: Ministry of Finance; Bank of Japan Source: Ministry of Finance. FY 11

13 Umemployment rate and active job openings-to-applicants s.a., ratio s.a., % Active job opennings-to-applicants ratio [Highest level since January 1974] Umemployment rate (right scale) [Lowest level since August 1993] 1.63 Active job openings-to-applicants ratio (Regular employees) Sources: Ministry of Internal Affairs and Communications; Ministry of Health, Labour and Welfare. Excess - Shortage, %pt All company Small company Source: Bank of Japan. Employment conditions Large company Employment situation 2.5 Excess Shortage month FY Average nominal wages for full-time and part-time workers y/y contribution, % Hourly wage for part-time workers Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ ⅠⅡ quarter Real wage income of employees Scheduled wage for full-time workers Source: Ministry of Health, Labor and Welfare. Real wage income of employees Number of employees Nominal wage Inflation Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ quarter Sources: Ministry of Internal Affairs and Communications; Ministry of Health, Labour and Welfare; Cabinet Office. 12

14 Prices Housing construction s.a., 215=1 CPI (Consumer Price Index) Core-core CPI (less fresh food and energy) 12 1 Housing construction starts s.a., ann., 1thousand units, 3MA s.a., ann., 1thousand units, 3MA Total Core CPI (less fresh food) CPI month Housing for sale (right scale) Housing for rent (right scale) Owner-occupied housing (right scale) month Source: Ministry of Land, Infrastructure, Transport and Tourism. Public investment 2. CPI (excluding impact of a consumption tax increase) chg. 2.2 s.a., tril. yen, 3MA Amount of public construction completed 1.5 Core-core CPI (less fresh food and energy) CPI Core CPI (less fresh food) month month Source: Ministry of Internal Affairs and Communications. Source: Ministry of Land, Infrastructure, Transport and Tourism. 13

15 3 (Reference 1) Prices CPI (excluding impact of a consumption tax increase) Core CPI (less fresh food) Core-core CPI (less fresh food and energy) month GDP deflator Domestic demand deflator GDP deflator -4 Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ Ⅰ Ⅲ ⅠⅡ Note: Shaded areas indicate the periods when the term deflation was used in the Monthly Economic Report by the Cabinet Office. Sources: Ministry of Internal Affairs and Communications; Cabinet Office. quarter 14

16 (Reference 2) Output gap 54 trillion yen 52 Potential GDP 5 48 Output gap Real GDP Note: Shaded areas indicate recession periods. year, quarter, % Ⅰ Ⅱ Potential GDP growth rate Real GDP growth rate Output gap Source: Cabinet Office. 15