News Japan's economy contracted in Q3

The economic contraction defies advance estimates by a Reuters poll of economists, which forecast 1.1% growth, and by the Japan Center for Economic Research, which put growth at 0.8%. Year on year, Japan's GDP grew 1.8% in the July to September quarter from the same period in 2021, marking the sixth consecutive quarter of growth following the pandemic-induced downturn. External factors were the big reason behind the negative growth. While exports expanded 1.9% from the previous three months, imports grew by 5.2% as higher energy costs and the weak yen pushed up the prices of products coming to Japan. The steeper import bill led to a decline in net exports, dragging GDP lower.

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Japan's economy is contracting decisively. It was not imagined that the economy would do this poorly when the country lost the No. 2 position to China in 2010. Its per capita GDP has become smaller than Taiwan's and nearly on par with Korea's. According to the International Monetary Fund, Korea's per capita GDP was estimated at $33,590 and Japan's at $34,360 for this year.
Taiwan and Korea's PPP exceed $50,000, whereas Japan has yet to reach the threshold. In wages, Korea has also become richer since 2015 as income has stagnated in Japan over the past 30 years. In 2020, Korea's average wage reached $41,960 based on the exchange rate at the time while Japan's average wage was $38,515, according to data from the Organization for Economic Cooperation and Development (OECD).

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Japan's downfall has been triggered by so-called Abenomics — the economic policy under the late prime minister Shinzo Abe — which was composed of an aggressive fiscal stimulus, monetary easing and structural reforms. Abenomics brought some positive results as stock prices doubled and employment nearly approached the perfect level. [...] But Tokyo's ultra-loose monetary policy has made Japanese poorer. The country's policy was influenced by the heterodox dubbed the Modern Monetary Theory (MMT), which supposes sovereign monetary countries like the United States, Britain, Japan and Canada are not constrained in government spending as they can print as much money as they need. Today, Japan is experiencing inflation of 3 percent, beyond the 2 percent target for the first time in 40 years after decades of deflation.

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Lothor said:

Where has all the money gone?

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Lothor said:

The author could have also pointed out that the decline has partly been due to an abject failure to raise or even maintain the wealth of its population. On the local news programme on NHK last night, they were interviewing people regarding the increase in the cost of paper. People were talking about how they were minimising their use of kitchen roll by ensuring that the entire sheet had been used to wipe something. Although this is laudable from an environmental perspective, it does clearly indicate an impoverished nation - I was commenting to someone last night that when I came to Japan 20 years ago, conspicuous consumption was everywhere, with every second woman on the train sat smugly with a Louis Vuitton bag on her lap. Where has all the money gone?

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