Consecutive GDP Dip
post date : 2015.11.27
The Asahi: “Mere hand-outs unacceptable”
The Sankei: “Aggressive strategies needed to break impasse”
The Nikkei: “Create environment conducive to private sector-led growth without delay”
The Mainichi: “Create environment for private sector-led growth”
The Yomiuri: “Basis for growth must be solidified without being excessively pessimistic”
Photo: Reuter/AFLO
Japan’s real-term gross domestic product in the July-September period declined 0.2 percent from the previous quarter, according to a preliminary figure released November 16 by the Cabinet Office. The figure, adjusted for commodity price fluctuations, represents an annualized decrease of 0.8 percent and a period of minus growth for the second consecutive quarter, indicating that the nation’s economy is at a standstill.
The five national dailies discussed this second straight chapter of negative GDP growth in their respective editorials dated November 17.
The Nihon Keizai Shimbun (Nikkei) said, “The breakdown [of the preliminary report] are not so bad, but show once again that the Japanese economy is stagnating.” Nonetheless, the paper’s analysis also said, “We should not be too pessimistic about economic prospects.”
The Sankei Shimbun also employed the phrase “we should not be too pessimistic” in its analysis of the economic situation. “While Japan’s GDP has seen negative growth for two continuous quarters, consumer spending has increased—albeit modestly—for the first time in two quarters,” The Sankei said. “Japan’s exports also registered an upswing. The major factors scuttling growth were a decline in capital investment and a reduction in [excess] inventories.”
The Yomiuri Shimbun stated there was no call for despondency, saying, “The foundation for medium- and long-term economic growth must be strengthened without too much pessimism over prospects.” However, the paper also said, “That a negative growth rate was recorded for the second quarter in a row symbolizes that the foundation for national economy is so weak that just a few external factors can delay the escape from deflation.”
A similar note was sounded by the The Asahi Shimbun, which said: “Our economic thinking should not be overly affected by immediate fluctuations in the GDP figures. Instead, we should examine our economic prospects from medium- and long-term perspectives.”
On the other hand, The Mainichi Shimbun said, “The government was optimistic, saying ‘the GDP decline in the April-June quarter was a temporary phenomenon caused by abnormal weather conditions and other factors.’” The Mainichi further opined: “The potential growth rate—an indicator of the true capability of the Japanese economy—is said to be below the 1-percent level due to a declining population and other factors. It clearly demonstrates that the government’s projections [for GDP growth] are out of touch with reality.”
■ Government’s economic policies need boosting
The Nikkei urged the government to lower the effective corporate tax rate to below the 30-percent level as soon as possible and impose deregulations. “[The government] must create a business environment conducive to a private sector-led economic recovery, while boosting the potential growth rate through structural reforms,” the economic daily said.
The Yomiuri stressed the necessity for collaborations between the government and corporations, saying, “It is of paramount importance that the private and public sectors make concerted efforts to steadily enhance and reinforce growth strategies.”
The Yomiuri also discussed emergency economic measures that the Cabinet plans to announce sometime this month. “The government should come up with a menu of measures that would raise the growth potential to cope with the declining birthrate without resorting to makeshift additional public works,” it said.
Meanwhile, The Sankei was skeptical about the nominal-term GDP target set by Prime Minister Shinzo Abe, and urged his administration to do more.
“The administration should make further efforts to allow the private sector to reach its potential,” The Sankei said. “Setting a target of \600 trillion in the nominal GDP gives an impression that the government is merely shouting slogans. It must hammer out specific measures related to the tax system and deregulation to improve corporate sentiment.”
For its part, The Mainichi said “propping up the economy with the ‘government-led economy’ will never be sustainable,” and “considering its grave fiscal conditions, the government should avoid shot-in-the-arm payouts, which only act as short-term economic boosters.”
The Asahi agreed that the government should not resort to such hand-outs in an attempt to buoy the economy. “Tax revenues for this fiscal year are likely to exceed initial estimates, but why are politicians talking about allocating this increased portion of the tax revenues to the supplementary budget as though its a matter of course?” the paper asked. “If they believe that domestic fiscal discipline can be maintained solely by additional avoiding national bond issuance, they are mistaken.”
■ Corporate responses key
The Yomiuri, The Mainichi and The Sankei said companies must take necessary measures if the nation is to secure economic growth.
“It is important for businesses to pass on their best-ever earnings to wage and dividend hikes,” The Yomiuri said. “It is necessary to ensure the establishment of ‘a virtuous economic circle’ in which an improvement in household finances leads to boosting personal consumption and thus enhancing corporate earnings.”
The Mainichi said, “It is essential to steadily improve the environment for the private sector so it can play a leading role in ensuring long-term growth.” The paper urged companies to work earnestly to improve remuneration for non-regular workers, who represent 40 percent of the nation’s workforce, and to take measures that would make it easier for more woman to join the workforce.
The Sankei said: “Weak momentum for economic recovery is discouraging companies from being aggressive, resulting in less-than-earnest domestic investment. This is problematic.
“Essentially, the issue hinges on whether firms can forge aggressive strategies on their own, while weighing the risks involved.”
*English translations of The Yomiuri are from The Japan News, while those for The Asahi, The Mainichi, The Nikkei and The Sankei are provisional. The contents of this page were made by the Foreign Press Center and do not reflect the opinion of the Japanese Government or any other organization.