Japan Export Gains Set Stage for Growth in 2011: Chart of Day
Japan’s exporters increased their role in the economy over the past six quarters, setting the stage for a sustained expansion next year as the yen weakens and global demand rises, said Goldman Sachs Group Inc.
The CHART OF THE DAY shows exports as a ratio of Japan’s gross domestic product have been gaining and the portion of private consumption decreasing since the first quarter of 2009 during the global financial crisis. Exports expanded to 16 percent of GDP in the third quarter from 12 percent, while private consumption shrank to 57 percent from 59 percent. The chart also shows quarterly changes in GDP.
The yen has already dropped 4.3 percent since reaching a 15-year high of 80.22 per dollar on Nov. 1. A further yen weakening in the second half of 2011, combined with improving economies in the U.S. and China, Japan’s biggest markets, will likely help exports grow “strongly,” said Chiwoong Lee, senior economist at Goldman Sachs in Tokyo. He expects Japan to grow 1.1 percent in 2011, supported by a 4.6 percent world expansion.
“The global economy, not domestic consumption, is fundamental to Japan’s export-driven economy, and in this sense we see 2011 as a year of improving fundamentals,” Lee said. “Exports’ key role will probably be more evident than before.”
A higher export-to-GDP ratio is important for Japan because gains in overseas sales lead to more capital expenditures and production, Lee said. Even with net exports, or shipments less imports, declining for the first time in six quarters on an annualized basis, Japan’s gross domestic product grew at a 4.5 percent annual rate in the three months ended Sept. 30, faster than the 3.9 percent reported last month, the Cabinet Office said yesterday.
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To contact the reporters on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net; Theresa Barraclough in Tokyo at tbarraclough@bloomberg.net
To contact the editor responsible for this story: Chris Anstey at canstey@bloomberg.net
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