- Japan’s economy grew faster than estimated
- EU demands fines on Poland
- Property and Car Sales Slowed down in China
Japan’s Economy Grew Faster than Estimated
In the April-June quarter, Japan’s economy has grown faster than expected. The Cabinet Office issued revised GDP numbers on Wednesday, showing that the economy grew by 1.9 percent on an annualized basis, beating economists’ median forecast for a 1.6% gain and the initial estimate of a 1.3% expansion.
Prime Minister Yoshihide Suga announced his resignation last Friday, setting the way for a ruling party leadership election on Sept. 29 in which candidates will lay out their promises to restore the world’s third-largest economy.
The upward revision was driven by higher-than-expected business spending. Despite this, some analysts believe Japan’s economic recovery is still weak due to slow COVID-19 vaccinations and pandemic regulations that stifle private-sector activities.
“Japan’s recovery is lagging behind other advanced economies. As such, the economy’s fully-fledged recovery needs to wait at least until early next year,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
Global chip shortages, on the other hand, may hinder Japanese vehicle manufacturing and shipments, while indicators of China’s economic slowdown raise concerns.
EU Demands Fines on Poland
In a long-running battle over Poland’s legal system, the European Union moved Tuesday to force Poland to follow the instruction of Europe’s top court, with plans to seek daily fines against the nationalist government in Warsaw.
The European Commission, the EU’s executive department, has requested that the European Court of Justice “impose financial penalties on Poland to enforce compliance,” in an unusual action. The commission, which oversees compliance with EU legislation, has asked the Luxembourg-based court to impose a “daily penalty” on Poland until the Polish Supreme Court improves its functioning.
The Supreme Court’s Disciplinary Chamber, which the right-wing ruling party has given the authority to discipline judges. Many Polish judges see the chamber as a weapon to compel courts to rule in the government’s favor. While Poland’s ruling party has filled the ranks of the highest courts, many lower court judges have acted independently and issued decisions that are contrary to the government’s interests.
The commission did not demand a specific penalty, but in a previous case involving Poland, a court ordered the Polish government to pay 100,000 euros every day until it complied in 2017.
Property and Car Sales Slowed Down in China
In August, Chinese consumers reduced their purchases of vehicles and apartments, as tighter property market restrictions and a widespread Covid outbreak in the country hampered the economy’s already sluggish recovery.
According to Bloomberg calculations based on weekly statistics, property sales in the four first-tier cities fell 16 percent in August compared to a year ago. Total automotive sales, including those to companies, are expected to have declined by roughly 22% over the same period, the worst drop since last March when the country was still on lockdown due to the initial Covid incidents.
In July, China’s economic growth slowed, with private consumption falling faster than the industrial and export sectors. This was increased by the Covid outbreak in August when cities across the country reintroduced lockdowns over the summer holidays when consumers typically travel and car spending typically increases.
Cars account for around 10% of monthly retail sales, but this year’s car output and sales have been hampered by a persistent lack of computer chips and falling demand. The slump is likely to have harmed August retail sales growth, which the government is expected to announce next week.