Nearly two months of economic data, world economic growth began to slow down again. Especially with Japan s economy is closely related to the U.S. and China s economic indicators showed a decline.
U.S. consumer downturn
In the United States, with the government to stop lowering property taxes, real estate related indicators have a substantial decline than generally expected, manufacturing production is also slowing down markedly. Also slow to improve the employment situation, personal consumption growth again after a halt since the spring.
Consumption data from a representative to observe the total retail sales of consumer goods United States, personal consumption, the basic trend can be seen to judge the heart of consumer retail sales of consumer goods chain in the fourth quarter of last year, up 4.8 in the first quarter rose 7.9 after the ring in the second quarter has shown a significant downward trend, its growth will fall to about 1.7 percent higher than Central. Included in GDP, personal consumption in the first quarter sequential growth of 3 the second quarter is also expected to fall to 2 .
The second quarter personal consumption growth to slow down that the United States since last year, personal consumption is largely dependent on asset recovery in prices. After last spring, the family forced to personal consumption expenditure compression pressure of the situation because the stock market sharply higher and home prices stabilize and be relieved, but the financial crisis in Europe caused the stock market fell in the second quarter, personal consumption is likely to once again face downward pressure. From the household savings rate and household net asset value of the close linkage between the can know this.
Slowdown in world economic environment once again, the U.S. stock market are difficult in the future, it is very likely to continue to pressure the U.S. consumer and the whole economy. According to economic data currently available estimates, the U.S. real GDP growth rate in the second quarter will be around 2.5 expected growth rate in the third quarter, about 2 . While recession is unlikely, but the current situation to lackluster U.S. economic outlook.
The impact of China s tightening policy began to show on the other hand, various economic data show that the Chinese economy began to slow down. China s first quarter GDP growth than the 11.9 percent last year, fell to 10.3 in the second quarter, industrial and mining production from the first quarter year on year growth rate of nearly 20 to 13.7 in June this year. Early this year, the tightening may have begun to impact the real economy in China.
So far, China s production growth with the increase in Japanese exports is closely related to the current situation appears to reduce Japan s exports probably can not be avoided.
This point with the previously mentioned U.S. economic growth slowed down again linked together, can expect foreign demand to drive economic growth in Japan will become increasingly weak. Therefore we can say the Japanese economy is entering such a situation: must seriously consider the domestic private demand to the extent to which support economic growth.
Japan s new growth strategy, the feasibility of worrying
Since the Senate election results so that Council is full of variables, so in order to introduce policies to increase by domestic private demand has become increasingly difficult. The Government will put forward in July this year, the annual budget estimates for 2011 baseline. Ministry of Finance has already identified the one hand, agree that social security costs associated with the natural increase of population aging, while new growth strategy for the financing of financial resources and the policy of cutting funding by 10 of the policy that was Gesheng Ting s opposition.
If you follow the medium term fiscal framework , to bond the next three years, except outside the control of financial expenditure established in 2010 within the budget, budget 2011 will be extremely tight.
One of the problems the current economic policy is not new growth strategy and budget linkage mechanism formed. In other words, the implementation of the new growth strategy, financial resources needed for the reduction of existing funding hopes Gesheng Ting, but not in the budget to provide security. If Gesheng Ting out of vested interests and not daring to consider the reduction of existing funding, the new growth strategy will be difficult to implement.
In addition, according to media has recently reported that in response to this situation the Government decided to add in the Cabinet is responsible for coordinating the budgeting and taxation, fiscal policy, the new organization. But because no legal authority, its budget process to how much influence is hard to predict. Thus, to revitalize the Japanese economy s new growth strategy woeful.
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