"On an annualised basis, the economy grew 2.4% in the period against forecasts of 1.5%.
Analysts said the first quarter growth rate was "very positive"."
It seems that QE method has been working well on Japan's economy, but is not sustainable.
"The Bank of Japan's current easing programme is designed to stimulate the country's economy by encouraging more lending, which in turn should see increased consumer spending.
It also hopes to drive greater investment activity and boost inflation.
The latest growth figures meant the chances of further near-term easing had diminished, said Mr Thieliant, but "with price pressures likely to remain subdued, more stimulus will be needed before too long, with the October meeting now the most likely venue."
It also hopes to drive greater investment activity and boost inflation.
The latest growth figures meant the chances of further near-term easing had diminished, said Mr Thieliant, but "with price pressures likely to remain subdued, more stimulus will be needed before too long, with the October meeting now the most likely venue."
I'm curious to see what's the next step in Japan's policy to stimulate economic growth.
Good for Japan! 2.4% growth in that short of a time span is incredible! Especially considering Japan isn't an emerging economy. I agree with Hang, it'll be interesting to see where they go from here, and see if they'll be able to sustain such growth through the rest of the year. I know Japan has also had a lot of problems with deflation in the past, so to see this growth driving a bit of inflation good to see, as well.
ReplyDeleteGood to see that QE is doing what it's supposed to be doing in Japan, but we know, like the article said, that it can't last forever. I wonder if the country will do anything to lower its interest rates in order to continue encouraging lending and borrowing.
ReplyDeleteI agree with Hang and Aleks that it will be interesting to see how Japan attempts to sustain growth from here given that quantitative easing is only a limited solution. It is interesting to be reading about a country where the stimulus is actually working and where growth is actually exceeding predictions as opposed to the issues surrounding Greece and China.
ReplyDeleteLike Bronte and others have said this is good news in light of things going on in the Eurozone and in China. I'd like to see how this will impact the economy in Japan over the long term even after they quit QE practices. How will they taper off without spiraling out of control?
ReplyDeleteI would also like to know how Japan plans on having sustainable levels of growth after they taper off quantitative easing practices. I am glad to hear their growth rate in the first quarter was higher than expected but like others have mentioned QE is purely a short term tool. Further policies that promote sustainable growth will have to be implemented (along side or after QE) to ensure real progress in Japan.
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ReplyDeleteThis is a great comeback for the Japanese economy after the recession it went through in the last quarter in 2010. I hope that Japan has more policies in addition to the QE to implement in order to sustain its economic growth.
ReplyDeleteAs others have previously stated above, the Japanese economy has been surprisingly exceeded growth rate expectations, which is great considering how much the Japanese economy fluctuates. Also as Tyler stated, QE is really only a short term solution and Japan needs to figure out appropriate policies to stimulate the economy once the QE's affect on growth rate diminishes. Overall, Japan will need to figure out how to make there economy more attractive for investors in order to sustain long-term growth.
ReplyDeleteIt is great that Japan was able to grow 2.4% in the first quarter. Quantitative Easing obviously did its job, but like many other people are mentioning on the blog, it's not sustainable. It will be interesting to see if QE is able to increase lending and consumer spending. Also, I am interested to see what other policies Japan will implement to continue to encourage lending and consumer spending.
ReplyDeleteIt's good to see that Quantitative Easing is working for Japan. I think that growth will be difficult for Japan in years to come because of it's aging population. Hopefully they'll be able to sustain this high growth despite this force working against them.
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