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.
Japan government upgrades economic view on rising consumer spending
Japan government upgrades economic view on rising consumer spending
Saudi ports brace for cargo surge as shipping lines reroute
RIYADH: Preliminary estimates suggest that several global shipping lines could reroute part of their operations to Saudi Arabia’s Red Sea ports, potentially adding 250,000 containers and 70,000 vehicles per month, according to Rayan Qutub, head of the Logistics Council at the Jeddah Chamber of Commerce, in an interview with Al-Eqtisadiah.
“Any disruption in the Strait of Hormuz not only affects maritime traffic in the Arabian Gulf but could also reshape global trade routes,” Qutub said, highlighting the strait’s status as one of the world’s most critical maritime chokepoints for energy and goods transport.
With rising regional tensions, international shipping companies are reassessing their routes, adjusting shipping lines, or exploring alternative sea lanes. This signals that the current challenges extend beyond the Arabian Gulf, impacting the global supply chain as a whole.
Limited impact on US, European shipments
The effects of these developments will not be uniform across trade routes. Qutub noted that goods from China and India, which rely heavily on routes through the Arabian Gulf, are most vulnerable to disruption. In contrast, shipments from Europe and the US typically traverse western maritime routes via the Suez Canal and the Red Sea, making them less susceptible to regional disturbances.
Saudi Arabia’s strategic location, he emphasized, strengthens the resilience of regional trade. The Kingdom operates an integrated network of Red Sea ports — including Jeddah, Rabigh, Yanbu, and Neom — that have benefited from substantial infrastructure upgrades and technological enhancements in recent years, boosting their capacity to absorb increased cargo volumes.
Red Sea bookings
Several major carriers, including MSC, CMA CGM, and Maersk, have already opened bookings to Saudi Red Sea ports, signaling a shift in operational focus to these strategically positioned hubs.
However, Qutub warned that rerouted shipments could increase sailing times. Cargo from Asia, which normally takes 30-45 days, might now require longer voyages via the Cape of Good Hope and the Mediterranean, potentially extending transit to 60-75 days in some cases.
These changes are also reflected in rising shipping costs, driven by longer routes, higher fuel consumption, and increased insurance premiums — a typical response when global trade patterns shift due to geopolitical pressures.
Qutub emphasized that Saudi Arabia’s transport and logistics sector is managing these developments through coordinated government oversight. The Ministry of Transport and Logistics, the Logistics National Committee, and the Logistics Partnership Council recently convened to evaluate the impact on trade and supply chains. Regular weekly meetings have been established to monitor developments and implement solutions to safeguard the stability of supplies and continuity of trade.
He noted that the Kingdom’s logistical readiness is the result of long-term strategic investments, encompassing ports, airports, road networks, rail systems, and logistics zones. Today, Saudi logistics integrates maritime, land, rail, and air transport, enabling a resilient response to global disruptions.
Qutub also highlighted the need for the private sector to continuously review logistics and crisis management strategies, develop alternative plans, and manage strategic stockpiles. Such measures are essential to mitigate temporary fluctuations in global trade and ensure smooth supply chain operations.
