Tuesday, August 12, 2003

Has the Japanese economy finally come out of the doldrums?
Japan's economy grew faster than expected between April and June, reinforcing the impression that business investment and a steady stream of exports have kickstarted a cyclical recovery.

The world's second-largest economy grew 0.6 per cent in the quarter in real terms according to preliminary government data released on Tuesday, surpassing the consensus forecast of 0.2 per cent. That represents annualised growth in gross domestic product of 2.3 per cent.
Note that this growth is just as good as US GDP growth in 2003:II, and the Japanese did it without a war, too.

Amazingly enough, because of Japan's inflation rate (or should that be deflation rate?) of -2.5%, the economy actually didn't grow at all in nominal terms. Consumption even went up, about 1.2% annualized, although there are some unsustainable practices driving this figure.
But Yoshihiko Senoo of the Cabinet Office said special factors were largely behind the positive results. Japanese rushed out to buy cigarettes before taxes went up nearly 1 yen (1 cent) a cigarette on July 1, inflating consumer spending, he said.
Damn, that's a lot of cigarettes. When people stocking up on smokes can affect your GDP, you know you've got one serious national nicotine habit.


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