ID :
39782
Fri, 01/09/2009 - 20:10
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https://oananews.org//node/39782
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Gov`t set to judge Japan`s latest economic boom ended in Oct. 2007
TOKYO, Jan. 9 Kyodo -
The government is set to announce that Japan's longest postwar economic
expansion lasted for 69 months through October 2007 before entering the current
recession, sources close to the matter said Friday.
The expansion, which was 12 months longer than the previous longest postwar
expansion, was due mainly to robust exports on the yen's depreciation and
growth in emerging economies, but failed to boost individual consumption
sufficiently because of weak salary rises, the sources said.
The Cabinet Office is expected to finalize the view after holding a meeting of
experts on Jan. 29.
Average annual economic growth during the latest expansion slipped below 2
percent in terms of real gross domestic product, compared with over 10 percent
recorded in the previous record expansion in late 1960s -- dubbed the ''Izanagi
boom'' -- and some 5 percent in the bubble economy period around 1990.
The Izanagi expansion lasted 57 months between 1966 and 1970.
Over 60 percent of GDP growth during the recent boom owed to increases in
exports, compared with 8 percent during the Izanagi period. As a result, major
exporters such as carmakers booked remarkable rises in profits.
But companies more sensitive to domestic economic conditions apparently
benefited less from the latest boom. Meanwhile, many firms put more weight on
dividend payments to shareholders in a move that limited returns to employers
and also capped salary growth for employees.
Nominal growth, which is before adjustment for price changes and is widely
believed to reflect people's actual feelings, was slower than real growth,
leading analysts to point to the possibility that the economic expansion had
failed to improve consumer sentiment sufficiently.
In mid-2007, companies started to see their earnings hurt by rising energy and
raw material costs while the global financial turmoil as a result of U.S.
subprime mortgage problems led to the current U.S. economic slowdown and a
weakening of Japanese exports, according to the sources.
Authorities in the United States have acknowledged that the world's biggest
economy entered a recession in December 2007.
==Kyodo
The government is set to announce that Japan's longest postwar economic
expansion lasted for 69 months through October 2007 before entering the current
recession, sources close to the matter said Friday.
The expansion, which was 12 months longer than the previous longest postwar
expansion, was due mainly to robust exports on the yen's depreciation and
growth in emerging economies, but failed to boost individual consumption
sufficiently because of weak salary rises, the sources said.
The Cabinet Office is expected to finalize the view after holding a meeting of
experts on Jan. 29.
Average annual economic growth during the latest expansion slipped below 2
percent in terms of real gross domestic product, compared with over 10 percent
recorded in the previous record expansion in late 1960s -- dubbed the ''Izanagi
boom'' -- and some 5 percent in the bubble economy period around 1990.
The Izanagi expansion lasted 57 months between 1966 and 1970.
Over 60 percent of GDP growth during the recent boom owed to increases in
exports, compared with 8 percent during the Izanagi period. As a result, major
exporters such as carmakers booked remarkable rises in profits.
But companies more sensitive to domestic economic conditions apparently
benefited less from the latest boom. Meanwhile, many firms put more weight on
dividend payments to shareholders in a move that limited returns to employers
and also capped salary growth for employees.
Nominal growth, which is before adjustment for price changes and is widely
believed to reflect people's actual feelings, was slower than real growth,
leading analysts to point to the possibility that the economic expansion had
failed to improve consumer sentiment sufficiently.
In mid-2007, companies started to see their earnings hurt by rising energy and
raw material costs while the global financial turmoil as a result of U.S.
subprime mortgage problems led to the current U.S. economic slowdown and a
weakening of Japanese exports, according to the sources.
Authorities in the United States have acknowledged that the world's biggest
economy entered a recession in December 2007.
==Kyodo
