Japan's statistical office reports the 13th consecutive month of falling real consumption. The domestic economy has been hit hard by two years of burgeoning inflation, which is stifling consumption. The fact that the existing subsidy for energy consumption in the private sector will be discontinued at the end of May is likely to be an additional burdening factor.
This is another example of the erratic politics of our time: in June, there is to be a tax cut for certain sections of Japanese households to counteract this effect. We are somewhat familiar with this from European politics: there is no clear line, only the consensus of the parties to intervene in the markets with ongoing interventions and thus suggest activity and care to voters.
I was talking to a colleague from Japan recently and that helped the magnitude of this sink in. For a developed nation to go through that kind of currency devaluation is pretty shocking.
It is a matter of time before India overtakes Japan as the world’s third largest economy
It has 10x the population, so it certainly ought to.
India is currently 4???
And if the situation continues as it is now, which I think is critical, consumption will continue to fall even more, can we say that Japan is currently in a recession?
From the data I've seen, I'd say that's not unreasonable.
Japan has been in a recession since 1990
No money to spend probably not going to help population collapse.
Or maybe it'll help the population collapse even faster.
;-)
Do you think if they spent money, it would help their economy?
That's an awesome question
(not sure that it would long term)
No
Producing is more important than spending
True, but you need to spend money to make money!
Energy, petroleum and electricity are expensive in Japan. Same with meat and dairy.
Interesting. According to this page of the Ministry of Economy, there will be indeed a tax cut for small, medium and big companies:
https://www.chusho.meti.go.jp/zaimu/zeisei/syotokukakudai.html
The document above says that the increase of the paychecks of employees will be used to deduce taxes. Up until 35% or 45% depending on the size of the company, taxes will be cut in proportion of the raise given to employees.
But where will the money go? Thanks to the coronavirus now I know it may go into Bitcoin, gold, but also into Dodgecoin, foreign cars...
At least it acknowledges long term inflation since the plan is until Reiwa 9 (2027 in Western calendar)