Sep 11, 2012

Economic growth: I think it’s spurning Japanese …

As the world's fifth largest economy, what happens in Japan matters. And the country's multifaceted problems appear not to be able to be corrected, writes Stephen Koukoulas of Business Spectator.

Japan is poised to slip back into recession. Quite staggeringly, this would be the sixth recession since the start of the 1990s. June quarter real GDP rose a tepid 0.2% but the partial indicators since then are pointing to a contraction in the September quarter with sharp falls in industrial production and weak retail spending.

In yet another blow to hopes of a turn in global economic activity, the dismal state of the Japanese economy points to more downside risks to commodity prices and, as Australia’s second largest export market, more problems for Australia’s export sector.

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22 thoughts on “Economic growth: I think it’s spurning Japanese …

  1. Julie Briggs

    Great article – I like the emphasis on talking about the facts of the situation.

  2. Scott

    “It is hard to see what policymakers can do to prevent this from happening”

    I think the most important thing would be an increase in skilled migration and to use incentives to get women into the workforce. Only 40% of the labour force is female which is way under the norm for most developed nations.

    These go against the Japanese culture of course, but I think it is time for a change if they want to get their economy sorted.

  3. Jimmy

    Scott – Interesting points, it would eb quite the dilemma for the Japanese though, hold on to your cultural heritage or improve you economic performance, which is more importrant to your society?

  4. Glen

    Typically blinkered business journalism. What matters to an individual — as opposed the owners of some monopoly corporate — is not aggregate GDP but rather GDP per capita. GDP per capita growth in the US is running at about 0.8%; in Japan it’s about 0.2% on your figures. That’s hardly a huge difference justifying a wrist-slitting article about the woes of latter. It sure has some woes, but so does the US.

    Eventually, population growth will have to stop or reverse. Everywhere. So eventually some generation of business journalists will have to notice that aggregate GPD is not the measure.

  5. Jimmy

    Glen – “GDP per capita growth in the US is running at about 0.8%; in Japan it’s about 0.2% on your figures. That’s hardly a huge difference justifying a wrist-slitting article about the woes of latter.” Well it is when you consider the US is travelling terribly and Japan has been in it’s funk for almost 2 decades where the US was growing strongly in the early 2000’s.

  6. Steve Gardner

    “The ideology of endless growth is the ideology of the cancer cell.” — Edward Abbey. The earth’s population cannot grow indefinitely, nor can we continue to consume resources at current levels. Therefore, at some point, we are going to have find some other way of conceiving what economic success is, and how to get there.

  7. Jimmy

    Steve – Any idea as to what that would be? How many people are employed in construction and manufacturing?

  8. Steve Gardner

    I don’t really, Jimmy. Big transitions are always painful — and what could be bigger than giving up the idea of ever-increasing consumption as the sine qua non of economics? If far more people are trained to build and make things than are required to actually build and the things that are needed, then a lot people are in for hard times. You can talk about re-skilling, but that’s never going to be the answer for everybody. We’re going to have to rethink everything from scratch, while continuing to live and work as we do that.

  9. Jimmy

    Steve – Even if re-skilling was the answer reskilling into what? If we cut back on population growth & consumerism to just what we need then what industry will be left untouched, what is the new area of employment.

    This would be more than a big transition, it would be the scrapping of our way of life.

  10. Edward James

    Not happy to respond to Paul Barry! I am Edward James a crikey subscriber !!!!! 0243419140

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