Japanese industrial output up 2.4% in January

| February 28, 2011 | 0 Comments
Japanese industrial output up 2.4% in January

The Trade Ministry has today reported a further rise in Japanese industrial output.

Output grew 2.4% in January on a monthly basis - its third consecutive rise and compares with a 3.3% increase in December.

According to the Ministry, growth was fuelled by demand for transport equipment, machinery and metals.

However, January’s figure was slightly lower than expectations but the further rise indicates conditions for growth and output are improving, according to analysts.

However, Japan’s recovery remains sluggish and the world’s third largest economy is battling with deflation and a high level of debt.

Last week, it was revealed Japanese core consumer prices fell 0.2% in January compared with a year ago – representing the 23rd consecutive monthly decline that the world’s third largest economy has been in deflation.

A short period of deflation (where prices fall rather than increase) could be a serious threat to the economy because it deters consumers and businesses from spending in expectation of falling prices.

The fall comes despite higher commodity prices.

Deflation was a problem for Japan during its so-called “Lost Decade” in the 1990s in which the economy struggled with falling prices.

Meanwhile, Japan’s debt currently stands at almost twice the country’s annual economic output and is the highest of any industrialised nation.

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