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Japan announces 17 trillion of yen economic stimulus package
Nov 08,2023
Recently, according to the "Nihon Keizai Shimbun" report, the Japanese government's interim cabinet meeting passed a new economic policy on the same day.
The contents include temporary income tax cuts, grant payments, extended energy price subsidies, etc., totaling more17trillion yen.The measures are aimed at countering rising prices and their pressure on Japanese households.
Japan announces economic stimulus plan
It is reported that the core content of Japan's economic stimulus plan is that from next year at the earliest6Beginning in January, the government will temporarily reduce fixed income tax and resident tax, totaling more3trillion yen.
The government plans to cut personal income tax and resident tax in one go.3Ten thousand yen and1Ten thousand yen. Low-income families will receive7Ten thousand yen.
In addition, the stimulus package will extend the payment of subsidies2024Year4At the end of the month, to curb oil prices and utility bills.
As an important support for the new economic policy, the Japanese government plans to formulate a supplementary budget for this year, with a total scale of about37.4trillion yen, of which the general accounting total is about13.1trillion yen.
This economic measure isIt consists of 5 pillars.They are to protect national life from high prices; to continuously raise wages, raise incomes and achieve local economic growth.
Promote domestic investment; overcome population decline and ensure the safety and peace of mind of the population.
Kishida said"Before next year's spring fight (spring labor talks), I will take the lead in pushing for wage increases more than this year".The tax incentives and subsidies available to businesses that raise workers' wages will be further expanded.
at the same time, he stressed,"This is an economic countermeasure aimed at getting rid of deflation once and for all".
According to official data, JapanThe core consumer price index rose 2.8 per cent in September from a year earlier, down from a 3.1 per cent rise in August but above the median market forecast of 2.7 per cent.
But the rise in prices is not what Japan expects."Demand-pull inflation", but "cost-push inflation".
Japan's economy in the doldrums
Recently, accordingCNBCnews, the Bank of Japan“Must be canceled”negative interest rates and predicts that the Bank of Japan will be in2024Year1monthly policy initiatives.
Subsequently, the Bank of Japan decided at a monetary policy meeting to cap the long-term interest rate control target from0.5%Adjusted1%, and allow for a degree of de facto excess over1%.
Since the end of last year, in response to the pressure of yen depreciation, the Bank of Japan has gradually relaxed its long-term interest rate control target0.25%Gradually expand1%.
Earlier, the Governor of the Bank of Japan, Yoshio Ueda, stated at a press conference that in the case of extremely high uncertainty, increasing the flexibility of monetary policy is an appropriate approach.
At present, high inflation and currency devaluation are plaguing the Japanese economy.
Former Japanese Prime Minister Shinzo Abe once proposed“Increasing wealth by raising wages, relying on small and medium-sized enterprises to boost exports,‘Wisdom’Is a treasure trove of wealth creation”This“New three arrows”Trying to stimulate economic growth.
However, despite the three arrows, the Japanese economy has not really out of the doldrums.On the one hand, Japan is limited by the lack of land, lack of natural resources and so on.“congenital condition”.
On the other hand, the problems of declining birthrate and aging population are serious, which further lead to the shortage of labor and consumption in Japan, resulting in a sustained economic decline.
The German-Japanese economy has turned around.
Earlier, IMF forecasts showed that Japan's nominalGDPis expected to be4.23Trillion dollars, down from the previous year0.2%.
while Germany is4.43Trillions of dollars, growth8.4%This will make Germany overtake Japan to become the world's third largest economy after the United States and China.
This is since1968For the first time since Japan's economic aggregate surpassed that of West Germany at the time, the rankings of Japan and Germany reversed.
Not only that, Japan's economy may be surpassed by India and South Korea in the future.
to this,IMFAlthough Japan's economic growth rate will rise slightly this year. But in the next few years, Japan's economic ranking is likely to fall further.
in addition,IMFIt is further predicted that Japan will2026Year2028Retreated to the world's fifth largest economy.
For this prediction, Japan's Kyodo news agency believes that the depreciation of the yen is the cause of Japan's nominalGDPOne of the reasons for being overtaken by Germany this year.According to Bloomberg analysis, the weakness of the yen is largely caused by differences in monetary policy among central banks.
The Federal Reserve and the European Central Bank raised interest rates sharply to combat inflation, while the Bank of Japan maintained stimulus mode, hoping to boost price growth after years of deflation.
The market expects the US Federal Reserve and the European Central Bank to keep interest rates unchanged at their upcoming meetings, but borrowing costs will remain high for a longer period of time, which is likely to continue to weigh on the yen.
On the other hand, in the long run, Japan's weak economic growth is also an important factor leading to the decline of Japan's ranking.
In response to the International Monetary Fund's prediction that the ranking of Japan and Germany will be reversed, the Minister of Economy, Trade and Industry of Japan stated that Japan's weak economic growth is a fact and innovation is needed to promote economic development and increase income.
at the same time, the japanese media said frankly,GDPAffected by the exchange rate, the actual ranking will be affected by the exchange rate trend before the end of the year, but Japan's low economic growth has been a long-term phenomenon.
The size of the economy is linked to international influence, and once it is overtaken by Germany, Japan's presence will decline further.
“Japan's growth potential has indeed fallen behind and remains sluggish. We want to take back the land we 've lost in the last two or three decades.”After being asked aboutIMFWhen predicting the attitude, Japan's Minister of Economy, Trade and Industry, Yasutoshi Nishimura, responded earlier.
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