Japan – Economic Data

·         Japanese Economy in FY 2016 :-

In FY2016, the Japanese economy is on a moderate recovery, supported by improvements in employment and income conditions. In the first half of FY2016, the domestic economy lacked momentum in private consumption and business investment, compared with the growth of income and corporate profits, while weakness was observed in oversea economies.

The government formulated an economic policy package, the “Economic Measures for Realizing Investment for the Future,” in order to overcome deflation completely and pave the way for steady economic growth. The Japanese economy is expected to recover moderately reflecting the effects of various polices including the economic measures, accompanied by continued improvements in employment and income conditions.

Owing to the decline in crude oil prices, the rate of increase in consumer prices is decreasing from a year earlier. Consequently, in FY2016, the real GDP is projected to increase by approximately 1.3%, and the nominal GDP is expected to increase by approximately 1.5%. The rate of increase in consumer prices (all items) is projected to be approximately 0.0%.

·         Basic Stance for FY 2017 Economic & Fiscal Management :-

The government remains committed to the basic principle of “Without economic revitalization, there can be no fiscal consolidation,” and aims at achieving both the target of nominal GDP of 600 trillion yen and fiscal consolidation target of FY2020.

 The government will implement the economic measures swiftly and steadily in order to lead to sustained economic growth led by private demand and a steady realization of a society in which all citizens are dynamically engaged, beyond short-term demand stimulus.

In order to realize a society in which all citizens are dynamically engaged, the government will implement the measures along with the “new three arrows” of Abenomics. Aiming at the target of “the largest nominal GDP in postwar history of 600 trillion yen,” the government will reinforce the positive cycle of the economy and ensure the progress toward overcoming deflation by utilizing the full range of policies, including facilitating regional reinvigoration, building national resilience and the empowerment of women. In addition, the government will steadily implement the “Japan Revitalization Strategy 2016” to promote a growth strategy toward expanding investments for the future. Aiming at the targets of “a desirable birthrate of 1.8” and “no one forced to leave their jobs for nursing care,” the government will promote environmental improvements for childcare and nursing care, offer support to fulfill the hope of every single citizen, dispite the people’s concerns regarding the future, and enhance the potential growth rate in order to tackle the issues of an aging society with a low birth rate.

With regard to fiscal consolidation, the government will strengthen expenditure reform in keeping with the “Plan to Advance Economic and Fiscal Revitalization” stipulated in the “Basic Policy on Economic and Fiscal Management and Reform 2015,” and the “Economic and Fiscal Revitalization Action Program 2016.” In FY2017, the second year of the plan, the government will firmly implement reform, including expenditure reform set out in the plan.

The government expects the Bank of Japan to achieve its price stability target of 2% inflation, in light of the current state of the economy and prices.

·         Economic Outlook for FY 2017 :-

In FY2017, the Japanese economy is expected to recover, supported by the growth in private demand & Implementing of the economic measures and the policy measures .Basic Stance for FY2017 Economic and Fiscal Management” will lead to an extension of the positive cycle of the economy with improvements in employment and income conditions. With regard to prices, the rate of increase in consumer prices is expected to increase, reflecting the tightening of demand and supply conditions with economic recovery. In this way, progress toward overcoming deflation is expected. Consequently, in FY2017, the real GDP is projected to increase by approximately 1.5%, and the nominal GDP is expected to increase by approximately 2.5%. The rate of increase in consumer prices (all items) is projected to be approximately 1.1%.

Attention should be given to the uncertainty in overseas economies and the effects of fluctuations in the financial and capital markets.

(1) Real Gross Domestic Product

(i) Private Consumption Expenditure :- Private consumption expenditure will increase moderately, supported by improvements in employment and income conditions. (An increase of approximately 0.8% is projected.)

(ii) Private Residential Investment :- With improvements in employment and income conditions, private residential investment will remain almost flat, supported by an accommodative monetary environment. (An increase of approximately 0.1% is projected.)

(iii) Private Non-Residential Investment :- Private non-residential investment will continue to increase owing to increases in industrial production and higher corporate earnings, etc. (An increase of approximately 3.4% is projected.)

(iv) Government Expenditure  :- Government spending will increase owing to a smooth and steady implementation of the economic measures and an increase in social security-related costs. (An increase of approximately 1.6% is projected.)

(v) External Demand :- External demand will increase owing to a moderate recovery of the world economy. (The contribution of external demand to the real GDP growth rate will be approximately 0.1%.)

(2) Real Gross National Income

 Real gross national income will grow faster than real GDP owing to an increase in income from overseas. (An increase of approximately 1.7% is projected.)

(3) Labor and Employment

 With improvements in employment conditions, the number of employees will continue to increase moderately, mainly owing to the further participation of women and the elderly in the labor market. (An increase of approximately 0.8% is projected.) The unemployment rate will decline slightly (to approximately 2.9%).

(4) Industrial Production

 Industrial production will increase owing to increases in exports and domestic demand, etc. (An increase of approximately 2.7% is projected.)

(5) Prices

 The rate of increase in the consumer price index (all items) will be approximately 1.1%, reflecting the tightening of demand and supply conditions with the economic recovery. The GDP deflator is expected to continue to rise. (An increase of approximately 0.9% is projected.)

(6) Balance of Payments

 The trade surplus and the current account surplus will increase owing to an increase in exports on the back of a moderate recovery of the world economy and an increase in income from overseas, etc. (The current account balance will be approximately 4.3% as a percentage of nominal GDP.)

Japan Economic Data for the last 5 Years