Third Consecutive Quarterly Expansion for Japan Despite COVID-19 Challenges
Investing.com - In the second quarter of this year, from April through June, Japan experienced a significant economic uptick. Government statistics indicate an annualized growth rate of 6.0%. This marks the third consecutive quarter where expansion has been primarily driven by external demand despite the ongoing pandemic's lukewarm recovery.
The country's gross domestic product (GDP) saw a quarterly increase of 1.5%, surpassing economists' median prediction of just 0.8% in a recent Reuters survey involving eighteen professionals in the field.
A closer look into key sectors reveals more nuanced details about Japan’s economic performance. Private consumption, which constitutes over half of the economy in this globally third-largest country, decreased slightly at a rate of 0.5% on a quarterly basis. In contrast, exports exhibited promising signs with a rise of 3.2%. Meanwhile, capital expenditures remained steady without any noticeable changes.
Anticipating the Repercussions of RBA's August Meeting on the Australian Economy
In anticipation of the forthcoming minutes from the Reserve Bank of Australia (RBA) meeting scheduled for 15th August at 11.30 am Sydney time, we delve into what might be expected based on recent monetary policy statements.
The latest quarterly publication by RBA has indicated a narrowing course for future policies. There has been an uptick in inflation forecast estimates to reach 3.1% by June 2025, slightly higher than May’s prediction of 3.0%, even though actual Q2 inflation numbers didn't meet these expectations.
On growth forecasts, there seems to be a downward adjustment stretching from H2 2023 through to H1 2025 regardless of upward adjustments in population growth projections.
Of significant note is that these predictions are hinged on RBA’s peak cash rate hitting around 4.25%. This figure is marginally above the current level of about 4.10% and significantly outpaces previous assumptions made in May which pegged it at only about 3.75%.
Looking ahead, it doesn’t seem like any drastic shift will occur within the tight labor market as reflected in imminent job reports. Although hiring plans remain strong, impediments such as supply constraints and skill mismatches may slow down new employment opportunities being created - making things tough for job seekers across sectors including retail where potential layoffs loom due to weak sales performance.
Despite holding rates steady twice consecutively now, it remains challenging for upcoming RBA minutes not to lean towards concerns over economic growth while maintaining its firm stance against rising inflation – especially after Governor Lowe hinted at entering into a “Calibration Phase” with regard to monetary policy decisions.