8/16/2019 eco asss

1/7

8/16/2019 eco asss

2/7

debt to ++A o! GDP in +8*: the highest ever recorded in the =>CD. Bet debt is

also the highest at *+0 o! GDP. Upward pressre on the debt ratio contines, with a

primary bdget de"cit o! nearly o! GDP in +8*: .Persistent deation has

contribted to the rn3p in the debt ratio by redcing nominal GDP while acting

as a headwind to otpt growth. $he +8** Great >ast Japan >arth

8/16/2019 eco asss

3/7

inclde important measres to promote growth, bt they need to be more ambitios

and

implemented rapidly. $he top priorities areF i( stabilising the si)e o! the labor !orce by

boosting the participation o! women and older people and e#panding inows o!

!oreign

workers ii( enhancing Japan/s integration in the world economy throgh tradeagreements,

notably the $rans3Paci"c Partnership '$PP( and the Japan3>U >conomic Partnership

9greement and iii( improving the bsiness climate by pgrading corporate

governance,

enhancing labor e#ibility and mobility, promoting ventre capital investment and

improving policies !or small and medim3si)ed enterprises 'S%>s(.

 Japan’s GDP trend direction and forecast

 $he gross domestic prodct 'GDP( measres o! national income and otpt !or agiven contryEs economy. $he gross domestic prodct 'GDP( is e

8/16/2019 eco asss

4/7

8.:0 percent !rom *078 ntil +8*-, reaching an all time high o! 1.+8 percent in the

second

8/16/2019 eco asss

5/7

 Japan’s ination/Deation trend direction and forecast

Consmer Price Inde# 'CPI( measres the weighted average price level o! goods and

services consmers pay. Its weights are determined by the spending pattern o!

hosehold in a standard year, crrently set at +8*8. $he Kank o! Japan targets its core

measre, CPI e#clding !resh !ood. $he US3styled core measre, CPI e#clding !ood and

energy, is also pblished in the ocial statistics release. $he government crrently does

not ocially pblish trimmed CPI measres. %onthly CPI reports are pblished toward

the end o! the !ollowing month. $he preliminary CPI report !or $okyo area is pblishedone month in advance and it is o!ten regarded as a leading indicator !or the national CPI.

In =ctober, the Japanese CPI e#clding !resh !ood was down 8.* year on year,

nchanged !rom September. 2owever, an overall tone o! the CPI report was not

deationary, in or view. ?hen !ood and energy are e#clded, CPI ination was p 8.

year on year. $he ocial CPI report does not contain the CPI measre pre!erred

nowadays by the KoJ, namely CPI e#clding !resh !ood and energy. In or calclation, the

measre shold show a year on year ination o! *.+, nchanged !rom September.

8/16/2019 eco asss

6/7

?e agree with the KoJEs assessment that there is a moderate inationary pressre

bilding p in the Japanese economy. $he decline in the headline CPI inde# is entirely

de to the energy prices. In =ctober, energy prices !ell by **.7 year on year,

depressing the overall CPI inde# by *.** point. ?e also agree that the tightening we

see in the labor market shold work to raise the ination rate in Japan, over time.

Consmer prices in Japan rose by 8.1 percent year3on3year in =ctober o! +8*-, a!tershowing no growth in the previos month and beating market e#pectations. It was the

highest "gre in !or months, as !ood cost rose !rther while prices o! !el dropped at a

slower pace. ?hen e#clding the eect o! energy and !resh !ood cost, a new indicator

pblished by the Kank o! Japan showed consmer prices rose by *.+ percent year3on3

year in =ctober +8*-. Ination @ate in Japan averaged 1.*+ percent !rom *0-7 ntil

+8*-, reaching an all time high o! +- percent in &ebrary o! *0: and a record low o!

3+.-+ percent in =ctober o! +880. Ination @ate in Japan is reported by the %inistry o!

Internal 9airs L Commnications.

8/16/2019 eco asss

7/7