Japan: Economy: Annual Trade Deficit Hits A Record High
Japan’s trade balance posts a record deficit in 2013. Strong demand for imported energy and a weaker currency are the main contributory factors.
In 2013, Japan’s goods trade balance deficit was 11.47 trillion Yen (£67bn). This is Japan’s third consecutive annual deficit and its largest to date. Demand for imported fuel after March 2011, coupled with a weaker Yen, are the major causes – responsible for around one third of the growth of imports. Exports over the year grew 9.5% to 69.8 trillion Yen (£410bn) and imports by 15.0% to 81.3 trillion Yen (£480bn) in value terms. The Yen has weakened by 21.8% against US dollar over the same period.
The trade deficit for December 2013 was 1.3 trillion yen (£7.6bn). This is the 18th consecutive monthly deficit. Exports and imports grew by 15.3% and 24.7% respectively over the same period last year.
Japanese figures show its trade surplus with the UK fell by 8.1% to 443 bn Yen (£2.6bn) in 2013, as UK imports grew faster than exports (10.0% vs. 1.8% in value term) over the year. Japan’s annual trade deficit grew to 5 trillion Yen, as imports increased by 17.4% even though Japanese exports also increased 9.7% for the first time in three years.
These figures come as no surprise given trends in the Japanese economy. It has been suggested that the Government may use the scale of the trade deficit as another reason to argue for further structural reform. Separately, Chief Cabinet Secretary Suga also pointed to the impact that imported fuel was having and reconfirmed the Government’s plans to resume nuclear electricity production once the relevant safety tests have been passed.
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