For the time being, it is expected to turn negative due to the reversal of the previous year's rise in energy prices and of the movements in durable consumer goods, and thereafter, it is likely to be around 0 percent again.
Since the 1970s, we have supplied comprehensive, quality products and services for Saudi Arabian consumers as a trusted partner for some of the world's leading consumer electronics brands, consumer durables, and commercial applications.
First, those economies are in the process of catching up with advanced economies in living standards, and thus they are characterized by strong potential demand for consumer durable goods and infrastructure investments.
Up to the mid-2000s when the global economy enjoyed high growth supported by the credit bubble, there was a worldwide boom in spending on consumer durables.
Voltas' core competence, and the manufacturing capabilities and wide product range of Beko will help us become a leading player in the consumer durables market in the country.
Against such a backdrop, an optimistic view on the economic outlook spread globally and an investment boom and a boost of demand for consumer durables surfaced in the United States and Europe.
Under such circumstances, optimism about the economic outlook prevailed around the globe, and a boom in the real estate market and a rise in durable goods consumption took place in the United States and Europe.
In the United States, household expenditure as a whole remained at a high level, but housing investment and spending on some types of durable consumer goods such as automobiles were showing signs of slowing down.
Moving on to the corporate sector, some weakness in production has remained, but there are prospects for further progress in inventory adjustments-- mainly in industries relating to the production of durable consumer goods including automobiles, as well as to housing-- by the end of the year.
Declining trend of durable consumer goods: mild deflation has been affected by a persistently declining trend in the prices of durable consumer goods(a decline of about 4.5 percent on average from 1997 to 2011), which account for about 10 percent of the total CPI weight.
With regard to durable consumer goods, such as automobiles and household electrical appliances, and construction goods related to housing investment, the magnitude of the subsequent decline in demand was larger than previously assumed by firms, causing inventory adjustments and thereby leading to somewhat weak developments in production.
Starting with the outlook for the economy, the pace of recovery is likely to slow temporarily in the second half of fiscal 2010 due to factors such as the slowdown in overseas economies and the ending of the boost from policy measures targeted at durable consumer goods, as well as the recent appreciation of the yen.
I would add that, although prices such as of food and daily necessities, as well as durable consumer goods, have been rising noticeably recently, the PPI reveals that the prices that have risen are mainly those of imported goods..
As labor-intensive sectors such as the consumer durables industry grow in otherEast Asian economies, exports of labor-intensive products from Japan have been declining, while those of capital-intensive products with higher value added, such as capital goodsand related parts, have been increasing.
This directly hit expenditure, mainly for business fixed investment and consumer durables, that is susceptible to the fund-raising environment such as bank lending or the degree of uncertainty about the future, and dealt a major blow to production in the Japanese manufacturing industry, which supplies such goods globally.
This is perhaps because firms have refrained from revising prices upward in response to the lackluster private consumption mentioned earlier, and because the yen's appreciation during last year affected the prices of consumer durable goods and other items.
The slow pace of recovery was also expected in the near future due to the continued slowdown in overseas economies, the ending of demand-boosting fiscal policy measures to promote expenditure on durable consumer goods, and the continued appreciation of the yen.
On this basis, a few members including this member pointed out that(1) there had been no major changes in indicators measuring consumer confidence, and sales of consumer durables had been rather firm recently, and(2) banks' lending attitude and credit spreads showed that corporate financing conditions had not been affected notably by financial market developments.
In addition, this Transaction will help, through diversification of the funding methods, stabilize ATS's consumer credit business mainly composed of credit card and sales financing. This will help improve the business conditions of sales operations for the Japanese makers selling their durable consumer goods in Thailand, which is expected to maintain and improve international competitiveness of Japanese corporations.
One of these members said that while sales of consumer durables such as automobiles and electrical appliances declined markedly, positive developments as the following underpinned private consumption:(1) firm sales of some luxury goods and goods and services whose prices had been lowered while maintaining their quality; and(2) brisk performance of businesses in food services, leisure activities, and travel.
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