Earlier comments by Japan's chief Cabinet secretary, Yoshihide Suga
- Q1 GDP growth shows economic fundamentals are strong
- Domestic demand remains supported
- Given price trends, no longer in deflation
- There are signs of weakness in some areas of exports and production
- Mainly caused by factors such as China's economy slowing down
Ugh, I think they really need to get some perspective on how to interpret the Q1 GDP report earlier. At first glance, the numbers look pretty but the details offer really little consolation in my view.
Exports fell by 2.4% q/q while imports declined by a whopping 4.6% q/q. I don't believe those figures signal that domestic demand is "supported". The fact that the large decline in imports helped to contribute to net exports and 0.4% of growth in Q1 says a lot about economic conditions when you look beyond the headline.
With regards to the October sales tax hike, I wouldn't say we're in the all clear just yet.
