Japan’s economy as anticipated slowed to the predicted 0.2% growth in the second quarter. Showing the economy had slipped dramatically from the 2% growth in the first quarter. The worsening economy was put down to failing exports due to the strength of the Yen and lack of corporate investment.
The economy’s growth would have been even poorer had it not been for the government’s recent investment in infrastructure and re-development.
In august Prime minister Abe ratified a stimulus program to benefit 22 million low income households. The package which totalled 28TRL Yen ($276BN) will continue until the end of the fiscal calendar. The sum in total equates to more than 5% of Japans GDP. The goal is that increased public spending will underpin the economy and gradually increase growth. Household spending in Japan attributes to 60% of the nation GDP and it is viewed many have held back despite some of the many large companies surpassing previous revenue records.
Annually Japanese wages had only increased 0.3%. Annually exports dropped to 5.6% y/y these included steel shipments and oil based goods. Not helped in any way by the strengthening Yen against major currencies, notably the dollar. Other causes for the slump included the leap year which inflated growth in the first quarter.