Inflation Makes Japan Economic Expansion Hard to Feel
Tokyo, Sept. 17 (Jiji Press)—The ongoing economic expansion in Japan has lasted 74 months through July based on recent preliminary government statistics, highly likely surpassing the “Izanami” boom from February 2002 to February 2008, the longest period of growth since the end of World War II.
Japan's ongoing 74-month economic expansion, lasting until July 2023, may surpass the longest growth period since World War II, known as the Izanami boom. During this expansion, nominal GDP increased as inflation rose, and corporate profits hit record highs due to the yen's sharp depreciation. However, real wages failed to grow significantly, making it difficult for households to sense the economic expansion.
The economic expansion's current vigor is questionable, with annualized quarter-on-quarter growth of inflation-adjusted real GDP averaging 1.3% between October-December 2020 and April-June 2023. This growth rate is similar to the Izanami boom and the previous economic expansion, which were driven by the Abenomics reflationary policy mix of Japan's former Prime Minister Shinzo Abe.
Despite a 5% wage hike in "shunto" annual labor-management negotiations until 2026, real wages have remained stagnant, keeping personal consumption sluggish.
Shinichiro Kobayashi of Mitsubishi UFJ Research and Consulting warned that the key to overcoming this barely noticeable economic expansion is to curb inflation and excessive yen depreciation, address concerns about the future, and create a stable environment for people to use their money with peace of mind. Whether this expansion will be officially recognized as the longest since the end of World War II will be determined by a panel of experts within the government agency responsible for identifying economic peak and trough periods.
Written by urgent.news from The Japan News by The Yomiuri Shimbun's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
