Private Households and Corporate Investment bring Japan back on Growth Track
All figures in %, annualized
Japan is back on growth track. Following a weak Q2 2015 with negative growth, Japan returns to positive territory supported by a solid domestic demand.
All areas of private domestic demand have seen growth in Q3 2015. Also exports have recovered well. Only the reduced inventory put pressure on the GDP result.
The consumption and investments from private households was supported by overall growth in salary payments to employees which at the end of Q3 stood at an annualized JPY 262,6 trillion which was 0,7% more than in Q2 and 1,4% higher than one year before.
A further indication of the overall confidence in the domestic market is the growth in bank lending which at the end of November 2015 stood at a total of JPY 493 Trillion, an increase of 2.4% compared to November 2014.
According to a survey by the Bank of Japan among the 50 largest banks in Japans, lending demand from none-producing mid and small size companies is especially high. These firms serve to the domestic market.
The government expects a 1.5% growth for the fiscal year 2015 (April to March 2016). Following a slow first quarter (Q2 2015) this may look optimistic, though the strength of the domestic demand will enjoy further backing by wages benefitting from increased seasonal bonuses again in Nov/Dec.
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