Amid ongoing trade disputes between the United States and China, the domestic and international economy is in the dark. On the 18th, the government lowered its economic judgment in a monthly economic report, and the economic growth rate in July-September fell to a historically low level in China. The global economy is in a declining trend, and the economic management of major countries is at a critical moment.
At an announcement meeting of the monthly economic report in October, Yasutoshi Nishimura rehabilitated the firmness of the domestic economy. “Personal consumption is picking up against the background of improved employment and income conditions.” On the other hand, “future consumer sentiment is weakening,” he cautioned.
In this report, economic judgment was lowered for the first time in five months, taking into account weak exports and production. The Chinese economy slowed amid the prolonged conflict between the US and China, and the impact spread to the Japanese manufacturing industry.
Still, the statement that “the economy is recovering moderately” continued from January last year. The government has not changed the view that the “longest post-war economic recovery” declared in January this year continues.
However, the consumption tax hike, which is a risk factor for the economy along with the conflict between the United States and China, has just been implemented, and it will begin to have an impact. The damage caused by large typhoons that have recently occurred also leads to the stagnation of economic activities. Regarding these effects, this report clarifies that “it is necessary to pay attention to”.
There are also indicators that may indicate that the recession has already begun. In the August economic trend index announced on the 7th of this month, the mechanical judgment of the keynote was lowered to “deterioration”. The period when the index showed “deterioration” in the past overlapped with the recession period later recognized by the government.
Daiwa Institute of Research Shunsuke Kobayashi, senior economist, points out that “there are many problems going forward. If the decline in exports and production continues after October, the economic recovery may be interrupted.”
It is an important political issue for the Abe administration to set the "economic first" to keep the economic recovery intact. This time, the monthly report, which is the official view of the economy, has raised the level of vigilance, and the demand for major economic measures is likely to increase. (Suna Takahashi, Shiki Iwasawa)
■ Intensification of friction between China and the United States ...
