Economic Short Comment （11 Sep 2023）
The polarization of inbound and domestic consumption～ The first time for a significant divergence of the two trends ～～4● Stagnation of domestic consumption
Domestic consumption is stagnating. The main background is that real wages continue to decline from theprevious year amid high inflation (Figure 1). As a result, consumers
are becoming more frugal, especially for necessities such as groceries 【Figure 1】
and clothing. On the other hand, sectors such as department stores（％）
6Real Wages（year-on-year）
nationwide
Osakaand hotels are doing well, but this is mainly due to the increase in4

inbound tourism. Department store sales have already surpassed pre-2

corona levels, and hotel occupancy rates are generally on an upward

0trend. As a result, the gap between inbound and domestic-2

consumption has widened recently, with some sectors doing well and-4

others doing poorly.

-6● Running out of steam in domestic travel

20
21
22
23
（Source）Ministry of Health,Labour and Welfare「Provisional Report of Monthly Labour Survey」

4 6 8 10 12 2 4 6 8 10 12 2 4 6 8 10 12 2 4Domestic consumption may seem to be doing well in travel-related【Figure 2】
sectors, but that is not necessarily the case. Demand surged temporarily （％） The number of hotel and inn guests（domestic,compared to 2019）
due to the use of national travel support, but it has already started to run 120
out of steam. This can be seen in the trend of hotel guests, which has 100
recently fallen below pre-corona levels in some months (Figure 2). In 80
other words, the current good performance of travel-related sectors is60
basically supported by the increase in inbound tourism. ThisNationalKansai
divergence between inbound and domestic consumption is also 40
reflected in the results of the Economy Watchers Survey. If we divide 20
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5
the current situation judgment by industry into “inbound-related” and21
22
23（Source）Tourism
agency「StatisticalSurveyon“other industries”, and look at the trend of each index (estimated value),Overnight travel」
the trends are clearly different. Inbound-related industries continue toshow an upward trend, while other industries are stagnating(Figure 3). 【Figure3】 Economy Watchers Survey
70● Divergence between inbound and domestic consumption

60

This is the first time that the trends of inbound and domestic
consumption have diverged so clearly. The expansion of the inboundmarket began around 2013 and continued for about seven years until thecorona disaster. Looking back at the economy during that period,
domestic demand was also in a long-term good condition due toAbenomics, so there was little divergence between inbound anddomestic consumption. Figure 4 extends the period covered by Figure50

DI for current conditions(level)
economic leveling403020100

inbound-related

other industries

1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7212223（Source）Cabinet Office「Economiy Watchers Survey」※ The purpose of this document is to provide information and is not intended to solicit product transactions. Additionally, thisdocument has been created based on data deemed reliable by our company, but it does not guarantee accuracy or completeness. Thecontents mentioned in this document are as of the time of writing and may be subject to change without notice in the future.

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3, but there is no sign of a widening gap as there is now.
● Points to watch in the future【Figure 4】
70

Economy Watchers Survey
DI for current conditions(level)60
economic l evelingOn the other hand, inbound consumption will increase further due to 50
factors such as the lifting of restrictions on Chinese group travel, but 40
domestic consumption is likely to stagnate due to inflation. This will 30
20result in a further divergence between domestic and inbound10
inbound-related
other industries
consumption, which will complicate economic judgments. Even if 0
03 05 07 09 11 13 15 17 19 21 23
indicators suggesting a recession increase, there may still be indicators （Source）Cabinet
Office「Economiy Watchers Survey」
showing good performance due to the increase in inboundconsumption, which could delay the judgment of a recession. If this happens, there is a risk that actions that go
against the economy, such as cutting off various subsidies, will occur even in situations where demand stimulation
measures are needed. Therefore, caution is needed in the future.
（Reference）
Resona Research Institute Co.,LtdHideyuki Araki, Chief Economist
hd-araki@rri.co.jp※ The purpose of this document is to provide information and is not intended to solicit product transactions. Additionally, thisdocument has been created based on data deemed reliable by our company, but it does not guarantee accuracy or completeness. Thecontents mentioned in this document are as of the time of writing and may be subject to change without notice in the future.

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