On Friday afternoon, Japan Government released November monthly economic report, formally announced that Japan's economy was in the "chronic" deflation. This is the Japan Government since June 2006, again recognized its economy into deflation. Japan Deputy Prime Minister Naoto expressed the hope that Japan Bank (Central Bank) and the Government in cooperation from deflation, and Japan Bank President is baichuan Fangming day after the end of the monetary policy meeting, said that "there are many definitions of deflation," avoid on Japan's economy is clear of deflation.
The so-called deflation mean prices continued to fall, according to the International Monetary Fund (IMF) is defined, its definition is the price of two consecutive years. Is Japan, raises prices continued to decline due to the following points: first, the demand or supply surplus. We all know, the price of goods and services is determined by supply and demand. In the overall economy, when the products in surplus, the price will decline. According to estimates, Japan economy exists about 40 trillion yen of insufficient demand. Second is the wage elements. When salaried income reduction, select cheap number of goods and services will increase. As of September of this year, Japan's nominal wage and salary income has been 14 months less than a month before, thus the formation pressure on prices. The third point is the yen and the large influx of cheap imported goods. Fourth, the Japan Society of "little child population structure of the aging" objectively exacerbated Japan social chronic demand and prices as expected.
In the November issue of the monthly economic report, the Japan Government follows the "equipment investment is stopped falling" and "economic overall situation is improving", etc. Naoto is expounded the Government finds that the economy is stuck in the three major chronic deflation. One is the consumer price index (CPI) continued to decline, the month of September this year without fresh products of the year-downward 2.3% CPI, as of August has decreased for four months, and set the maximum decreased in the past. While most private investigation agency forecasts that in the next 3 years Japan probably can't get rid of prices. Second, the nominal GDP growth for two consecutive quarters of growth lower than actual. Real GDP represents Japan economy requirements, and potential GDP represents the quantity of Japan's economy. Japan real GDP in the second and third quarters of consecutive realization of positive growth, but affected by price changes affect, and people on the actual situation of the economy to feel closer to the nominal GDP had six consecutive quarters of negative growth. Third, the demand capacity with potential supply and demand gap "between the" expanded. If you need less supply is positive, then the excess demand, supply, prices rising pressures facing, if it is negative, it indicates that insufficient, excess demand, prices decreased pressure facing. According to the Japan Cabinet Office projections, 2009 between 4 and 6-month supply and demand gap as a negative amount 7.8%, in accordance with, the demand or supply surplus scale as high as 40 trillion yen.
Japan Government in March 2001, recognized for the first time in the post-war economy deflation. Later, as Japan's economy began to recover from 2002, the Government of Japan in July 2006, the monthly economic report, delete the "deflation", but has not publicly announced that have shaken off deflation. Last year after Lehman Brothers Inc. bankruptcy, the impact on Japan's economy is growing, gradually into a serious demand for the month of August this year, the decline in the CPI 2.4% all-time high.
Finance Minister Fujii hirohisa in 20 days after the end of the Cabinet of Ministers meeting on Japan's economy deflation. He said: "we have a strong sense of crisis. Prices were welcomed by the times in the past there have been, but now the State is not good. "Objectively, prices help increase consumers ' purchasing power, but serious demand caused by the continued fall in prices can lead to deterioration in corporate profits, social wage levels decline, increased unemployment and the negative effects of disruptions of prosperity. Tax reduction will result in the deterioration of public finances and expenditure.
In fact, excluding energy and food prices in addition to appear in the second half of last year, short-term positive growth since September 1998 has been a negative growth. It was thus that deflation has actually been in Japan lasted 10 years. Moreover, the CPI is in accordance with the selected item as an object of a statistical and computing, which does not include the price is extremely cheap merchant homegrown brand and sale items. Therefore, actual prices ranges maybe even greater. As prices continued to fall, Japan's nominal GDP and the income from salaried capacity in accordance with, the conversion has both fallen from 1992 levels.
In the main developed countries, only Japan serious deflation. Since Japan's automotive and electrical appliances, and other major export market is rapidly shrinking, serious oversupply. In addition, in the "little child growing ageing", the Japan economic objective on chronic insufficient domestic demand. People have even started to worry there prices and the economy deteriorated between the vicious circle "deflation spiral" phenomenon.
In deflation, Japan Government wants to give the Central Bank policy cooperation and support. Here there are media reports that the Government of Japan announced the economy deflation itself is forcing the banks to take loose monetary policy and pressure of a kind. In March 2001, the Government announced the economy deflation after three days, Japan Bank announces total relaxed monetary policy. But 20-baichuan Fangming, in equipment investment and personal consumption, final demand serious shortage, "only through the expansion of liquidity supply and cannot drive the prices", in order to overcome deflation and expand the supply of funds that a negative attitude. He believes that currently it is important that efforts to address the demand weakness of this fundamental issue. He said, "make sure that people have confidence in the future of family life and the anticipated growth form is the most important" and vows to continue through the implementation of the current extremely low interest rate policy and sufficient liquidity supply on economic recovery provides a strong support. But people here said that Japan Bank to use monetary policy has been limited, Japan has been very difficult to find a solution from the domestic market demand for good medicine recipe, only from China and other countries find a way out in foreign demand.
>Japan Government was concerned that, if allowed to drop in price, there is no possible economic "second hit bottom". Deputy Prime Minister Naoto suggested that in order to deflation, "will focus efforts from the employment perspective, to promote economic growth, economic measures". He said it would speed up $ 2.7 trillion yen in 2009 the second supplementary budget, submitted in January next year, usually considered in Congress. Here are the major media, Government of Japan and Japan Bank should coordinate the pace, a common response to the economic crisis. The Japan economic news that Japan's economy and so on, it is possible to form a "lost 20 years".
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