Containers are seen at an industrial port in Kawasaki. Photo: REUTERS file
business

Japan's economy to shrink at fastest pace in decades this fiscal year

11 Comments
By Kaori Kaneko

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11 Comments
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Japan's economy to shrink at fastest pace in decades 

Fully re-open the economy already.

forcing the government to compile another stimulus package

Isn't the J government already trillions of yen in debt?

0 ( +3 / -3 )

Another stimulus package?

Just when I have gotten used to ramen and bread crusts!

7 ( +7 / -0 )

No doubt Abe would use the pandemic as an excuse to mask his utter incompetence. Abenomics is a joke!

5 ( +6 / -1 )

forcing the government to compile another stimulus package 

How so?

It is a feasible option to NOT compile ANOTHER “stimulus package”, and let things be. (Or even do some 3rd arrow reform, rather than only 2nd arrow “flexible spending”)

These packages never create any stimulus except amongst the cronies who produce small, flimsy, ugly face masks and the like, at Darth Abe’s whim.

They mainly create more future debt for tax payers to worry about, more incentive to save money or invest it offshore where there has been genuine growth, while Japan has been floundering around with these dopey borrow-and -spend schemes annually.

0 ( +1 / -1 )

The notion of borrow-and-spending out of the coronavirus recession is just daft.

0 ( +1 / -1 )

I agree with all of the above, what I add will distress some. And it's OK to disagree. The economy was in a spiral before the virus, if you remember there were stimulus spending before the virus many. The problem (I think) is the government just can't be fiscally responsible virus or not. They want every day to be the same for their own comefort forgetting completely the comefort of those same people who pay to make them comefortabley numb. It's beyond not fair.

0 ( +0 / -0 )

Words failed me because the Japanese government is still spending money buying fighter jets from usa when they are preparing for japanese economy shrinkage.

-1 ( +0 / -1 )

"These packages never create any stimulus except amongst the cronies who produce small, flimsy, ugly face masks and the like, at Darth Abe’s whim."

Time for Econ 102, Basic Macroeconomics. The Equation of National Income is: GDP = C + I + G + (EX-IM)

In words that says Gross Domestic Product is the sum of consumption, investment, government spending and net exports. Currently in Japan C and I are falling. If you cut G, GDP will fall even further and accelerate the decline in economic output. Economists all over the world therefore understand that when GDP is falling a way to reverse the decline is to increase government spending. Where the stimulus goes matters as you want the greatest multiplier effect possible. What is a multiplier effect? Well, increasing G increases GPD by the same amount. But the money added to the economy by the increase in G also leads to increases in Consumption, C and Investment, I. Thus for every yen or dollar increase in G, the GDP rises more. The judgement call comes when deciding which recipients of that increase in G will boost GDP by the most. That is not a straightforward call and calls for considerable econometric modeling, some good guesses and luck.

-1 ( +0 / -1 )

"Words failed me because the Japanese government is still spending money buying fighter jets from usa when they are preparing for japanese economy shrinkage."

Aside from what I wrote above regarding the Equation of National Income, China considers some Japanese territory to be theirs, including Okinawa and they are intent on someday settling scores for WWII. I have a Chinese wife. Take if from me the Chinese have been taught to hate Japan and to desire revenge. If Japan is not well defended you better start learning Mandarin now. You will need it to send your tax return to Beijing.

0 ( +0 / -0 )

The future of Japan is to work together with China. The rest is nonsense, with or without fighter jets from USA.

0 ( +0 / -0 )

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