Debt Free News

Japan’s economy remains slower

December 26, 2006

Here is a fascinating debt free article regarding the world’s second best economy:

Yesterday in Japan (No, the do not take the day off as we do for Christmas), government in their held steady on its reporting for the country’s economy. The report states that the reason for the slow down is a slow in consumer spending. In fact, due to the remaining lull caused by the smaller amount of consumer purchasing, the main bank's governor is sticking to his cautiousness regarding any early interest rate increases.

In Japan, the fact that the country is producing more products and capital investments their have increased is of no real effect to the country’s need for better economy. Japan is considered to posses the 2^nd biggest economy worldwide. This new reporting lands Japan in a 5 year spread to recovery which began back in the beginning of 2002.

On the other hand, this economic reporting which considers such topics as gross domestic production in it, has let it be known to all that a slow down in consumer spending is believed to stem from poor wages in the country. Because of poor wages and fewer raises, consumers are said to be only spending at a rate they can afford.

In country product consumption demand, which is quite responsible for more than 50% of Japan’s economy, slashed it’s growth in the months of  July, August, and September (3^rd quarter), causing Japan’s government to lessen the country’s game plan for its economy in the beginning of December.

The government left its report of the economy at the same it was in November, which was the last time it lessened the outlook.

Large company earnings and investments are improving. However, on the industrial side of things, production is still up, but shipping these products out of the country has not improved. So, Japan is cranking out product, but consumers there are not buying at improved rates and exports are not improving at all. Even though production has improved, these companies are not giving employees raises, so they are spending less on the products they produce in Japan. Even though the companies are making the items and selling them to retail and elsewhere, the consumers are not buying at improved rates.

So, even though the economy itself may be bustling in production, which has risen the country out of its 10 year slide, the products are getting purchased because employees are not making any extra money.

Back in the later part of the 1960s, Japan’s economy was at a historic high.

The Prime Minister in Japan stated that an economic change needed to take place on a public recognized level for certain and that his idea is to see that it comes about.

Other economists in Japan are steadfast to stating the economy id doing just fine. By saying that the economic recover in Japan was slow but steady.

The bank of Japan is in decision making mode as to whether it will stave off another interest rate hike in Japan or not. We will be watching. Our debt free news article readers will be interested to know about the second largest economy in the world for sure.

(542)