Japan government upgrades economic view on rising consumer spending

The Japanese government raised its assessment of consumer spending for the first time in seven months after retail sales, household spending, and new car sales gained momentum toward the end of last year. (Reuters)
Updated 19 January 2018
0

Japan government upgrades economic view on rising consumer spending

TOKYO: The Japanese government raised its assessment of the economy in January for the first time in seven months due to rising consumer spending, an encouraging sign that inflation could start to pick up this year.
“Japan’s economy is gradually recovering,” the Cabinet Office said in its monthly economic report on Friday. That marked an upgrade from December, when the Cabinet Office said the economy is on a recovery path.
The government also raised its assessment of consumer spending for the first time in seven months after retail sales, household spending, and new car sales gained momentum toward the end of last year.
Consumer spending is “recovering,” which is an upgrade from the phrase “gradual recovery” used in last month’s report.
The assessment increases the chance that the government will declare an end to deflation, which would amount to a declaration of victory for Prime Minister Shinzo Abe’s ambitious campaign to reflate the economy.
Data for November and December showed consumer spending bounced back from a brief lull caused by bad weather, a Cabinet Office official told reporters.
Improving consumer sentiment, and rising restaurant sales, are also reasons to be optimistic about consumption, the official said.
However, the Cabinet Office left unchanged its assessment that consumer prices are flat, showing it may still take some time for improvements in the economy to feed through to consumer prices.
The Cabinet Office also stuck with its view that industrial output and capital expenditure are gradually expanding.
Abe took office in late 2012 with a bold plan to shake off 15 years of deflation and sub-par growth.
Gross domestic product has expanded for the past seven quarters, the strongest run of growth in a decade. The output gap shows demand exceeds supply by the most in more than nine years. Stock prices are their highest in 26 years, and corporate profits are near an all-time high.
Business investment is rising, exports are growing, and the labor market is the tightest in decades, due partly to a shrinking population.
Japan’s economy minister has hinted that it is possible to declare an end to deflation before consumer prices reach the Bank of Japan’s 2 percent inflation target.
In November, the core consumer price index, which includes oil products but excludes fresh food, rose 0.9 percent year-on-year. This is an improvement over 2016, when prices fell, but still not close to the BOJ’s price target.


Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

Updated 14 December 2018
0

Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

  • Ransom payment would set dangerous precedent
  • NOC declared force majeure on exports on Monday

BENGHAZI: Libya’s state-owned National Oil Corp. (NOC) said it was against paying a ransom to an armed group that has halted crude production at the country’s largest oilfield.
“Any attempt to pay a ransom to the armed militia which shut down El Sharara (oilfield) would set a dangerous precedent that would threaten the recovery of the Libyan economy,” NOC Chairman Mustafa Sanalla said in a statement on the company’s website.
NOC on Monday declared force majeure on exports from the 315,000-barrels-per-day oilfield after it was seized at the weekend by a local militia group.
The nearby El-Feel oilfield, which uses the same power supply as El Sharara, was still producing normally, a spokesman for NOC said, without giving an output figure. The field usually pumps around 70,000 bpd.
Since 2013 Libya has faced a wave of blockages of oilfields and export terminals by armed groups and civilians trying to press the country’s weak state into concessions.
Officials have tended to end such action by paying off protesters who demand to be added to the public payroll.
At El Sharara, in southern Libya, a mix of state-paid guards, civilians and tribesmen have occupied the field, camping there since Saturday, protesters and oil workers said. The protesters work in shifts, with some going home at night.
NOC has evacuated some staff by plane, engineers at the oilfield said. A number of sub-stations away from the main field have been vacated and equipment removed.
The occupiers are divided, with members of the Petroleum Facilities Guard (PFG) indicating they would end the blockade in return for a quick cash payment, oil workers say. The PFG has demanded more men be added to the public payroll.
The tribesmen have asked for long-term development funds, which might take time.
Libya is run by two competing, weak governments. Armed groups, tribesmen and normal Libyans tend to vent their anger about high inflation and a lack of infrastructure on the NOC, which they see as a cash cow booking billions of dollars in oil and gas revenues annually.