Japan and South Korea released the latest GDP data, consumption contracted into a weak board

In this era of an increasingly interconnected global economy, the dynamics of each major economy affect the nerves of global markets. Recently, Japan and South Korea have released their latest GDP (gross domestic product) data, behind a series of figures, not only maps the status quo of the two countries' economic development, but also reveals the common challenge facing the global economic recovery process - shrinking consumption has become a key factor restricting economic growth.

As one of the four Asian Tigers, South Korea's economic performance has been closely watched. The latest GDP data shows that although the overall economy has grown, the growth rate is significantly lower than expected, and internal structural problems are prominent. It is particularly noteworthy that the weak growth of private consumption has become one of the main factors dragging down economic growth. This shows that in the post-epidemic era, the confidence and spending power of South Korean consumers have not fully recovered, which constitutes a certain constraint on economic recovery.

Like South Korea, Japan's GDP figures, the world's third-largest economy, also reflect weakness in the consumer market. Japan has long faced problems such as an aging population and insufficient domestic demand, and the epidemic has exacerbated this trend. The latest data show that Japan's consumer spending continues to decline, not only affecting retail, catering and other services, but also affecting many areas such as manufacturing. The downturn in the consumer market has become a stumbling block on the road to Japan's economic recovery.

There are many reasons for the contraction of consumption to restrict economic growth, the author analyzes from the following aspects.

The epidemic is undoubtedly the most immediate cause. Despite the gradual increase in global vaccination rates, the uncertainty and volatility of the pandemic continues to have a profound impact on consumer confidence. People are worried about the instability of future income, tend to reduce non-essential spending, and increase the willingness to save, which inhibits the release of consumer demand.

Pressure of economic structural transformation

Both Japan and South Korea are under pressure to transform their economic structures. South Korea needs to wean itself off its over-reliance on exports, especially for high-tech products such as semiconductors, while Japan needs to address the structural problems left over from its long "lost two decades." In this process, the adjustment of traditional industries, the development of emerging industries, and labor market reforms may have a negative impact on consumer confidence and spending power in the short term.

Policy effect lag

Monetary easing, fiscal stimulus and other measures taken by the government to stimulate the economy often take a while to show their effects. In addition, the efficiency problems in the process of policy implementation and the lack of precision of the target group may also lead to the reduction of the effect of the policy, and it is difficult to quickly boost the consumer market.

Consumption as one of the "troika" of economic growth, its importance is self-evident. The contraction of the consumer market in Japan and South Korea has not only directly affected the development of retail, catering, tourism and other industries, but also affected many fields such as manufacturing and logistics through the transmission mechanism of the industrial chain. In the long run, sluggish consumption could also undermine business confidence in investment and affect technological innovation and industrial upgrading, thus posing a threat to the long-term competitiveness of the two economies.

Overall, the latest GDP data released by Japan and South Korea reveal the problem of shrinking consumption as a weak link in the economic recovery. In the face of this challenge, the two countries need to find ways to break the situation from various aspects, and jointly promote sustained and healthy economic development by strengthening epidemic prevention and control, promoting economic restructuring, implementing targeted and effective policy stimulus and strengthening international cooperation.