TOKYO, Aug. 17 (Xinhua) -- Although Japan's economic growth turned positive as shown by the statistics of the second quarter, it remained sluggish due to poor control of the COVID-19 pandemic and persistently weak personal consumption.
Japan's real gross domestic product (GDP) inched up 0.3 percent in the second quarter compared to the previous quarter, up 1.3 percent at an annual rate, according to statistics released by the Cabinet Office on Monday.
Statistics showed that economic activity in Japan continued to be depressed in the second quarter as a result of the third state of emergency, with private consumption, which accounts for more than half of the country's GDP, rising just 0.8 percent from the previous quarter, which is seen by economists as making up for a pervious sharp decline.
In the first quarter of this year, Japan's economy experienced negative growth again, with its real GDP declining by 1.0 percent compared to the previous quarter, and personal consumption declining by 1.4 percent from the previous quarter.
Japanese experts believed that against the backdrop of the unchecked pandemic, limited economic activities, a deteriorating employment environment and declining income, it is difficult for private consumption in Japan to grow strongly.
Weak control of the COVID-19 outbreak has forced the Japanese government to issue three states of emergency this year, and there is still a possibility that the scope and duration of the state of emergency will be extended, continuously suppressing personal consumption which can act as a strong support for economic recovery.
The prolonged outbreak of COVID-19 has led to a sustained downturn in related industries and high unemployment in Japan, which has also become a drag on private consumption.
The number of the unemployed in Japan rose 9 percent in the second quarter from a year earlier to 2.33 million, with about a third of those being out of work for more than a year, according to data released by the Ministry of Internal Affairs and Communications.
In addition, business equipment investment, another pillar of domestic demand, rose by 1.7 percent in the second quarter from the previous quarter as the rapid recovery of major economies around the world has driven the sustained growth of Japanese exports.
According to the Ministry of Finance, driven by strong demand from major overseas markets such as China, Japan's exports in the first half of 2021 surged 23.2 percent year on year, surpassing the level of the same period in 2019 before the outbreak of COVID-19.
In terms of external demand, in the second quarter of 2021, Japan's exports of goods and services increased by 2.9 percent compared with the previous quarter, while imports increased by 5.1 percent. The net exports after the balance between imports and exports declined, and the contribution of external demand to Japan's economic growth decreased.
Most economists believed exports and a boost in equipment investment contributed to Japan's economic recovery in the second quarter.
Takahide Kiuchi, a researcher at Nomura Research Institute, however, said the global crisis in the semiconductor supply chain in the second quarter caused Japanese automakers to cut production, which also crimped personal consumption and export growth.
At the same time, the global economic recovery remains uncertain, and Japan's exports and equipment investment will face downside risks with economic recovery prospects not promising, the expert said.
Since the spring of this year, raw material prices in the international market have risen sharply, pressuring Japan's manufacturing sector, said Hideo Kumano, chief economist at Dai-ichi Life Research Institute.
In the future, imported inflation is likely to pass from manufacturing to non-manufacturing, undermining domestic purchasing power and further dragging on Japan's economic recovery, he said. Enditem
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August 17, 2021 at 05:37PM
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