Japan’s failure to spur inflation is still creating angst about the nation’s future, but experts say gross domestic product data this week may well show that the economy has still managed to eke out five straight quarters of expansion in the land of the Rising Sun.
That would be the best run since 2006, during Japan’s last period of political stability under then-Prime Minister Junichiro Koizumi.
Thanks to a strong showing from exporters -- helped by a yen back at the more competitive levels of a decade ago -- Shinzo Abe’s government is set to better Koizumi’s run later this year.
Whether or not increases in consumer prices take hold won’t be known until much later this year, with expectations of higher energy costs and hopes for higher wages, which would encourage household spending and allow retailers to charge more for their wares.
All this is needed to create the kind of GDP growth and inflation for Japan to manage its huge debt burden.
For the next few quarters, though, Japan is on course to get modest economic expansion without much in the way of inflation.
Forecasts for the GDP report due on Thursday morning call for GDP to have increased 1.7% in the three months through March, on an annualized basis, from the previous quarter.
It's also hoped that net exports, or shipments less imports, will add 0.1 percentage points to growth, after contributing 0.2 percentage points and 0.4 percentage points in the previous quarters.
Business spending is projected to fall 0.4%, after a 2% jump three months earlier.
Private consumption is expected to rise 0.5% reflecting a rebound from the period through December
