Japan exports slump on weak China demand, heaping pressure on economy

The data reinforces worries that weak external demand may hurt company profits and in turn curb business expenditures. (AP)
Updated 17 April 2019
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Japan exports slump on weak China demand, heaping pressure on economy

  • Ministry of Finance data out on Wednesday showed exports fell 2.4 percent in March from a year earlier
  • Exports to China, Japan’s biggest trading partner, fell 9.4 percent year-on-year in March

TOKYO: Japan’s exports fell for a fourth straight month in March as China-bound shipments slumped again, reinforcing growing anxiety that weak external demand is likely to have knocked first quarter economic growth. Ministry of Finance data out on Wednesday showed exports fell 2.4 percent in March from a year earlier, compared with a 2.7 percent drop predicted by economists in a Reuters poll, and followed a 1.2 percent decline in February. The data reinforces worries that weak external demand may hurt company profits and in turn curb business expenditures, workers’ wages and consumer spending in a broad hit to growth. Some analysts expect Japan’s economy likely swung back to a mild contraction in the first quarter as declines in exports and capital expenditure dented private consumption. That would pile pressure on Prime Minister Shinzo Abe to once again delay a planned sales tax hike in October needed to fix the world’s heaviest public debt burden at twice the size of its economy. The economy grew at an annualized rate of 1.9 percent in the fourth quarter driven by business and consumer spending. Bank of Japan Governor Haruhiko Kuroda last week stuck to his optimism that Japan’s export-dependent economy will soon climb out of its doldrums as global growth recovers. Kuroda, however, did warn of lingering risks to the global outlook, including the outcome of US-China trade talks and Britain’s potentially messy departure from the European Union. Markets expect the BOJ to stand pat at a rate review next week, though some investors say the recent batch of soft indicators may pile pressure on policymakers to add to the central bank’s already massive stimulus later in the year. Wednesday’s data came on the heels of this week’s bilateral trade talks between Tokyo and Washington. US President Donald Trump has prodded Japanese automakers to boost more jobs in the United States as the White House has threatened to impose tariffs of up to 25 percent on imported vehicles, on the grounds of national security. Imports of Japanese cars make up about two-thirds of Japan’s $69 billion annual trade surplus with the United States. US-bound exports rose 4.4 percent in the year to March, driven by car shipments, which grew 5.1 percent. Imports from the United States declined 0.2 percent, resulting in Japan’s trade surplus with the country rising 9.8 percent year-on-year to 683.6 billion yen. Exports to China, Japan’s biggest trading partner, fell 9.4 percent year-on-year in March, reversing from a 5.6 percent gain in February. Asia-bound shipments, which account for more than half of overall exports, fell 5.5 percent, down for a fifth straight month. Japan’s overall imports rose 1.1 percent in the year to March, undershooting the median estimate for a 2.6 percent annual increase, resulting in a trade surplus of 528.5 billion yen. 


Lebanon’s Hariri calls for cabinet solidarity in budget debate

Updated 18 June 2019
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Lebanon’s Hariri calls for cabinet solidarity in budget debate

  • The PM said cabinet ministers need to be united and responsible
  • Lebanon’s debt is almost 150% of its GDP
BEIRUT, June 18 : Lebanon Prime Minister Saad Al-Hariri on Tuesday called for parliament to quickly approve the country’s 2019 budget and urged his coalition government to avoid internal disputes.
The cabinet this month agreed a budget plan that shrinks the projected fiscal deficit by 4 percentage points from last year to 7.6% by cutting spending and raising taxes and other fees.
“What I want during the debate is for us to be responsible and united, and not contradictory,” Hariri said in a statement, addressing cabinet ministers as to their comportment during the parliament debate.
Parliament’s finance committee is debating the draft budget and has suggested amendments, local newspapers reported. It will then put the budget to the full assembly to ratify it.
Parliament is mostly composed of parties that are also present in the coalition government and which supported the budget there.
Since the budget was agreed there have been fierce arguments between parties in the coalition over several subjects, though these have not targeted the budget.
Lebanon has one of the world’s heaviest debt burdens, equivalent to about 150% of GDP, and the International Monetary Fund has urged it to cut spending.
“We have held 19 cabinet meetings to agree on this draft budget and these sessions were not for fun, but for deep, detailed debate over every clause and every idea,” Hariri said.
“For this reason, I consider it the responsibility of each of us in government to have ministerial solidarity...to defend in parliament the decision that we have taken together,” he added.
After the 2019 budget is agreed, the cabinet must quickly start working on the 2020 budget and on approving the first phase of a program of investments toward which foreign donors have offered $11 billion in project financing. (Reporting by Angus McDowall, editing by Ed Osmond)