Abe delaying retirement, Q2 growth strong

Prime Minister Abe is set to remain in power for another three years following the LDP leadership elections. One of the few substantive reform proposals he has put forward is an increase in the retirement age beyond the current 65. While this would reduce pension spending, it is less certain whether it would increase employment among the elderly. And any change wouldn’t be implemented for a couple of more years.
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Japan Data Response

Labour Market & Industrial Production (Oct. 2021)

Employment fell sharply again in October despite the lifting of states of emergency declarations at the start of the month. However, it should rebound sharply across November and December in line with the revival in face-to-face service sector activity. And while industrial production only edged up in October, we think it too will rebound more strongly this month and next, potentially approaching its recent April peak in December.

30 November 2021

Japan Data Response

Japan Retail Sales (Oct. 2021)

Retail sales kept rising in October despite another drop in motor vehicles sales. With supply disruptions now starting to ease and mobility picking up, they should continue to increase.

29 November 2021

Japan Economics Weekly

Government seeks to revive soggy chip industry

The breakdown of PM Kishida’s new supplementary budget released today showed that ¥600 billion has been allocated to reviving semiconductor manufacturing in Japan. The centrepiece of the plan is a new TSMC factory in Kumamoto Prefecture that will produce the mid-range chips critical for car production. Given recent supply disruptions caused by chip shortages, beefing up local production makes strategic sense. We think the government’s new interventionist approach to stimulating mid-range chip production may succeed, but plans to make inroads into high-range chip production are likely to fall flat.

26 November 2021

More from Capital Economics Economist

China Economics Weekly

Inflation fears overdone, more policy tweaks

Chinese consumers appear to have become more worried about inflation recently. But these concerns may reflect a broader sense of unease among households in response to a weakening labour market rather than about inflation itself, which seems likely to remain fairly contained. Policymakers, for their part, still seem more concerned about slowing growth than about inflation risks and have continued to expand their efforts to lower financing costs and boost lending.

7 September 2018

Australia & New Zealand Data Response

International Trade (Jul.)

It looks as though the contribution to real GDP growth in the third quarter from net exports will be similar to the 0.1 percentage point added in the second quarter. But the near-stagnation in imports in July provides some tentative evidence that domestic demand may have softened.

6 September 2018

Australia & New Zealand Data Response

Private Capex Survey (Q2) & Building Approvals (Jul.)

Just 18 months after it got going, the recovery in private investment appears to be running out of steam. This partly explains why we estimate that GDP in the second quarter may have risen by just 0.5% q/q.

30 August 2018
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