Some unpleasant Japanese lessons

Article Abstract:

Japan is seeking to boost economic growth by looser fiscal policy. The Japanese economy is likely to be hit by the Asian financial crisis, and real gross domestic product may grow by only 0.3% in 1998, according to Goldman Sachs. Depreciation of the Japanese yen has not helped boost growth, so looser fiscal policy appears to be the only option. There is doubt as to whether looser fiscal policy will be effective since it may be offset by a belief that interest rates will rise and by consumers' fears of later tax rises, leading to higher savings rates.

Legislative Bodies, Budget

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Japan: in suspense

Article Abstract:

The decline in the value of the Japanese yen may relieve pressure on the Japanese authorities to provide a fiscal boost to the economy. A fiscal stimulus is seen as needed to foster a continuing drop in the yen's value and help promote economic growth. Gross domestic product (GDP) is expected to have shrunk in 2nd qtr 1995. Interest rates are likely to be reduced but by less than was previously expected. Deregulation is also affected by political pressures.

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Japan: picking up the tab

Article Abstract:

Japan has reduced taxes and spent on public works in order to combat recession, and this has led to a budget deficit. The budget deficit for the FY ending Mar 1997 is forecast at 4.5% of gross domestic product (GDP). The cabinet has approved a sales tax increase to be implemented from Apr 1997 and further measures are needed. Income tax accounts for some 67% of total tax revenue and Japan's population is ageing, reducing the number of people paying tax.

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