Finanzmarktturbulenzen bremsen Japans Wirtschaftswachstum

Market Turbulences Curb Japans Economic Growth

Financial turbulences worldwide, most importantly in the United States, curb Japan’s economic growth. Japanese exports to the United States decreased significantly in the first half of 2008. So far, Japan has been able to maintain export growth in total by increasing its shipments to other regions. China became the most important buyer of goods made in Japan in July 2008. Altogether, however, exports and private investment, which have been the driving forces of economic growth in Japan in recent years, have been growing slower in 2008.
This is problematic, as stagnating incomes and a huge fiscal deficit lead to a situation where private consumption cannot provide strong impulses for growth. On top of this consumer prices are rising.
On the other hand, private enterprises are rather well positioned and expenditures for research and development are high. Neither firms nor private households are excessively indebted. Financial institutions are also in a relatively good shape.
The largest risks are the very high levels of outstanding government debt and the potential effects of the financial turbulences worldwide. The latter can have negative effects on the Japanese economy be it through financial markets or – where they are already having an impact – indirectly over reducing exports.
However, Japanese companies are very competitive in international markets. Slow growth perspectives at home further increase their efforts for expansion abroad. The long-term focus on neighboring fast-growing markets in Asia without neglecting other regions such as the United States and Europe should continue to pay off.