Sunday, November 14, 2010
Japan's Economy Shows Strong Growth
Japan's economy has shown strong growth and has been growing at annual rate of 3.9% in the third quarter. Just recently Japan has been in a recession which is said to be as worse as the recession after World War II. Much of this growth is due to heavy consumer spending due to government incentives which are currently coming to end. So people are trying to benefit as much as the can before its to late. Deflation has also helped in the growth as prices have decreased. Private consumption which accounts for 60% of the economy increased 1.1% which was helped by government incentives to fuel effiecient cars and energy. This growth however is suggested to slow down over the next three months as these goverment incentives will come to an end. Although there is growth in the overall economy, Japan's labor market still is rather stagnant with jobs not being created as quickly as expected. Do you think Japan will be able to keep growing at this pace or will they slump back into a possible double dip recession?
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2 comments:
I believe this is artificial growth mainly because of their ever increasing concern of their population getting older. The ratio in Japan of old to young is tremendously bad for the economy in the long run. Many economist have seen this issue arise many years ago.
I agree that the growth will probably not be sustained, but I think that the Japanese economy will be better off in the long run due to the investments Japan has been making in energy efficiency. Due to its dependency on imports and exports, Japan's current recovery is mostly out of its control and in the hands of foreign markets.
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