TOKYO: A key Japanese economic index fell in August and the government on Monday downgraded its view to “worsening,” indicating the export-reliant economy might face slipping into recession.
Concerns have risen as the US-China trade dispute and slowing external demand dent Japan’s economic recovery.
The index of coincident economic indicators, which consists of a range of data including factory output, employment and retail sales data, slipped a preliminary 0.4 point in August from the previous month, the Cabinet Office said on Monday.
The separate index for leading economic indicators, a gauge of the economy a few months ahead that’s compiled using data such as job offers and consumer sentiment, dropped 2.0 points from July, the Cabinet Office said.
The last time the government gave a “worsening” assessment was for April data.
The downgrade could add to speculation the government will hike spending, as Prime Minister Shinzo Abe on Friday said he was ready to take “all possible steps” if risks to the economy intensified following a sales tax hike and rising global uncertainty.
Japan rolled out a twice-delayed increase in the sales tax to 10 percent from 8 percent on Oct. 1. The move is seen as critical for fixing the country’s tattered finances but could tip the economy, hurt by the US-China trade war and weak external demand, into recession.
For April-June, Japan reported growth of 0.3 percent from the previous quarter. The last time Japan was in a technical recession, defined as two consecutive quarters of contraction, was the second half of 2015.
In recent months, the government’s assessment on the coincident index was that the economy likely stopped falling.
The government will later examine the economy comprehensively with professors and economists on a panel and officially define the country’s economic cycle.
Japan’s growth has slowed as the US-China trade dispute hit the country’s exports, sending big manufacturers sentiment — as measured by the Bank of Japan’s tankan survey — to a six-year low in the July-September quarter.
Market expectations for more policy easing by the Bank of Japan have increased after the central bank signaled its readiness to expand stimulus as early as its Oct. 30-31 meeting.
Key Japan economic index falls, government changes view to ‘worsening’
Key Japan economic index falls, government changes view to ‘worsening’
- Concerns have risen as the US-China trade dispute and slowing external demand dent Japan’s economic recovery
- The last time the government gave a “worsening” assessment was for April data
Lebanese social entrepreneur Omar Itani recognized by Schwab Foundation
- FabricAID co-founder among 21 global recipients recognized for social innovation
DAVOS: Lebanon’s Omar Itani is one of 21 recipients of the Social Entrepreneurs and Innovators of the Year Award by the Schwab Foundation for Social Entrepreneurship.
Itani is the co-founder of social enterprise FabricAID, which aims to “eradicate symptoms of poverty” by collecting and sanitizing secondhand clothing before placing items in stores in “extremely marginalized areas,” he told Arab News on the sidelines of the World Economic Forum in Davos, Switzerland.
With prices ranging from $0.25 to $4, the goal is for people to have a “dignified shopping experience” at affordable prices, he added.
FabricAID operates a network of clothing collection bins across key locations in Lebanon and Jordan, allowing people to donate pre-loved items. The garments are cleaned and sorted before being sold through the organization’s stores, while items that cannot be resold due to damage or heavy wear are repurposed for other uses, including corporate merchandise.
Since its launch, FabricAID has sold more than 1 million items, reached 200,000 beneficiaries and is preparing to expand into the Egyptian market.
Amid uncertainty in the Middle East, Itani advised young entrepreneurs to reframe challenges as opportunities.
“In Lebanon and the Arab world, we complain a lot,” he said. Understandably so, as “there are a lot of issues” in the region, resulting in people feeling frustrated and wanting to move away. But, he added, “a good portion of the challenges” facing the Middle East are “great economic and commercial opportunities.”
Over the past year, social innovators raised a combined $970 million in funding and secured a further $89 million in non-cash contributions, according to the Schwab Foundation’s recent report, “Built to Last: Social Innovation in Transition.”
This is particularly significant in an environment of geopolitical uncertainty and at a time when 82 percent report being affected by shrinking resources, triggering delays in program rollout (70 percent) and disruptions to scaling plans (72 percent).
Francois Bonnici, director of the Schwab Foundation for Social Entrepreneurship and a member of the World Economic Forum’s Executive Committee, said: “The next decade must move the models of social innovation decisively from the margins to the mainstream, transforming not only markets but mindsets.”
Award recipients take part in a structured three-year engagement with the Schwab Foundation, after which they join its global network as lifelong members. The program connects social entrepreneurs with international peers, collaborative initiatives, and capacity-building support aimed at strengthening and scaling their work.
