THE looming global economic downturn may be more challenging for Malaysia than the economic crisis it faced in 1998.
Japan’s economic recovery faltered in May, as factory output fell and the nation’s jobless rate rose for a third straight month.
Industrial production in the world’s second biggest economy dropped 0.1 percent from the previous month, the government said Tuesday.
The result marks the first drop in three months and just misses Kyodo news agency’s average forecast for a flat reading.
Lower factory output of large passenger cars, semiconductor-related machinery and flat-panel display machinery contributed to the month’s retreat, according to the Ministry of Economy, Trade and Industry.
Meanwhile, the country’s seasonally adjusted jobless rate climbed to 5.2 percent, up from 5.1 percent in April and the highest level since December.
The number of jobless stood at 3.47 million, which is unchanged from the previous year, according to the Ministry of Internal Affairs and Communications.
Those with jobs fell 0.7 percent to 62.95 million.
The results reflect a still-fragile recovery for Japan’s economy, where an export boom has been slow to translate into sustained improvements for workers and families.
Brisk overseas demand also wasn’t enough in May for factories to make up for the fading effects of government stimulus measures.
The drop in industrial production, however, is expected to be temporary. The government predicts the figure to rise 0.4 percent in June and 1 percent in July.
A separate government report showed household spending in May fell a real 0.7 percent from a year earlier as incomes retreated.
Average monthly household income fell a real 2.4 percent from a year earlier to 421,413 yen ($4,714).
A labor ministry report pointed to some bright spots in the jobs picture.
The ratio of job offers to job seekers stood at a seasonally adjusted 0.50 in May, up from 0.48 in April.
That means there were 50 positions available for every 100 job seekers
China’s economy revved into high gear during the first quarter of 2010, growing 11.9% compared with a year ago, a spokesman for the National Statistics Bureau said Thursday.
The nation’s gross domestic product — a broad measure of economic output — gained 1.2% from the fourth quarter of 2009.
“The momentum of national economic recovery has further expanded, which has laid a good foundation for reaching the targets set for the whole year,” spokesman Li Xiaochao said.
The growth was fueled by industrial growth — 22% for heavy industry and 14% for light industry — and a nearly 18% expansion in consumer retail sales.
The figures mark a return to double-digit economic growth for China, which saw its white-hot economy slump to merely robust in 2009. China was able to maintain moderate economic growth even as the U.S. and Japanese economies were in recession last year.
In 2007, China’s gross domestic product grew 13%.
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Despite the explosive start to the year, Li tried to dampen expectations.
“This 11.9% is higher than the 8% target set by the National People’s Congress set for the whole year but the latter half of the year will definitely face challenges because the base GDP figure of late last year is higher,” Li said.
The high levels of economic growth China has been experiencing typically result in inflationary pressures, raising prices and ultimately slowing expansion.
“China’s drivers of economic growth should become more balanced as policymakers seek to transition from rapid growth to longer-term stability,” said Jing Ulrich, a China equities and commodities expert with J.P. Morgan. “Higher than expected inflation could necessitate more aggressive tightening, while global trade disputes could hinder the export recovery.”
“Despite China’s positive outlook, some risks remain to sustained economic recovery,” Ulrich said. “Excessive tightening in the property sector could dampen home sales, which would be negative for commodities, employment and housing-related consumption.”
