Japan's annual GDP expected to grow at about 1% in 2024: US think tank

The US think tank’s leading economic index (LEI) for Japan decreased by 0.2 per cent in March this year to 87.3, after no change in February. Over the six-month period ending in March, the LEI for the country declined by 1.5 per cent, after growing by 0.3 per cent over the previous six months.

Its coincident economic index (CEI) for Japan was unchanged in March at 98.7, after a downwardly-revised 0.2-per cent increase in February.

As a result, the CEI for Japan fell by 0.1 per cent over the six-month period from September 2023 to March 2024, continuing the 0.2-per cent decline between March and September 2023.

The LEI provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term. The CEI provides an indication of the current state of the economy.

"The LEI for Japan resumed its downward trend in March,” said Justyna Zabinska-La Monica, senior manager, business cycle indicators, at the think tank, in a release.

“A decline in housing starts, the increase in suspension of transactions, which is an equivalent of bankruptcies, and weaker labor productivity in manufacturing fueled March decline. The LEI has been decreasing slowly but continuously since September 2023, except in February when it was flat, resulting in negative six-month and annual growth rates of the LEI,” she said.

“However, the pace of contraction has slowed since a year ago. This suggests that headwinds to growth, while still present, have lessened a little. The recent depreciation of the yen, by over 10 per cent since the beginning of the year against the dollar, which is not reflected in the LEI, is also likely to support exports,” she said.

“On the other hand, a persistently weak currency can have a negative impact on inflation, which would prompt stricter monetary stance, adding strain on growth,” she added.

Fibre2Fashion News Desk (DS)