Japan Warns of Deflation, Falling Growth Potential

Economy Politics

Tokyo, Nov. 6 (Jiji Press)--A Japanese government report released Friday expressed concerns over the possibility that the country will face deflationary pressure due to a lack of demand and a decline in growth potential stemming from a fall in capital expenditures.

The annual report on the Japanese economy and public finance underlined the need to improve productivity by boosting investment in technologies and human resources.

The report said the coronavirus outbreak is estimated to have pushed down personal consumption by some 31 trillion yen in April-June on an annualized basis from the level projected based on household income and assets.

The figure is far larger than 5.5 trillion yen in lost consumption in January-March 2009 due to the global financial crisis and 6.5 trillion yen in January-March 2011 caused by the massive earthquake and tsunami that devastated coastal areas in northeastern Japan, according to the report.

The white paper also estimated that the manufacturing industry had some two million surplus workers and the nonmanufacturing industry had four million such workers in April-June.

[Copyright The Jiji Press, Ltd.]

Jiji Press