TITLE

Achieving fiscal sustainability in Japan

PUB. DATE
April 2011
SOURCE
OECD Economic Surveys: Japan;Apr2011, Vol. 2011 Issue 17, p43
SOURCE TYPE
Country Report
DOC. TYPE
Article
ABSTRACT
With gross government debt surpassing 200% of GDP, Japan's fiscal situation is in uncharted territory. Correcting years of rising debt will require a large and sustained effort. A detailed and credible multi-year fiscal consolidation plan that includes both spending cuts and revenue increases will be a top priority to maintain confidence and prevent a run-up in interest rates. Given the size of the adjustment in the fiscal balance needed just to stabilise the debt ratio in 2020 -- around 10% of GDP -- it is important to start fiscal consolidation as soon as possible, while taking into account the need to reconstruct areas devastated by the Great East Japan Earthquake. The consumption tax should be the main source of additional revenue, given that it is low and its impact on economic activity is less negative than other taxes. Tax measures should be accompanied by social security reform that limits spending increases, including in health care, and addresses problems in pensions. Given the large deterioration in Japan's fiscal situation since the collapse of the asset bubble in 1990 and the unprecedented size of its fiscal problem, a strong fiscal policy framework is important to reinforce the credibility of a medium-term fiscal plan. The framework may be improved through such steps as a multi-year budgeting plan, a stronger legal basis for the fiscal targets and an objective body at arm's-length from the policymaking process.
ACCESSION #
71249626

 

Related Articles

  • Thou Shalt Buy Stocks. Wehrfritz, George; Takayama, Hideko; Itoi, Kay // Newsweek (Atlantic Edition);03/26/2001 (Atlantic Edition), Vol. 137 Issue 13, p78 

    Reports on the decline of Japan's economy and expectations that there will be a recession in the country. Issue of the bad debt load of Japanese banks and the government's Rebirth Plan for the economy; Role of the government in bank reform; Fall in the Nikkei stock exchange in anticipation of...

  • Economic Policy: Fiscal Policy and Outlook.  // Japan Country Monitor;Mar2012, p14 

    The article reports on the economic policy in Japan particularly in fiscal policy in which the national debt has increased.

  • Economic Policy: Fiscal Situation - Recent Developments.  // Japan Country Monitor;Feb2012, p15 

    The article offers developments related to the fiscal environment and economic policy of Japan.

  • Japan Is Back, So Beware. Tasker, Peter // Newsweek (Pacific Edition);3/20/2006 (Pacific Edition), Vol. 147 Issue 12, p41 

    The article looks at how the Bank of Japan's decision in March 2006 to stop "quantitative easing," or pumping money into banks, heralds the end of free money in Japan. The decision is its first real monetary tightening since Japan's bubble economy imploded. The article discusses how Japan is...

  • A Slow Developer. Madrid, Allan // Newsweek (Pacific Edition);8/21/2006 (Pacific Edition), Vol. 148 Issue 8/9, p4 

    The article focuses on the 2006 Commitment to Development Index, just released by the CGD and "Foreign Policy" magazine. According to the author, the index ranks Japan last despite the fact that it ranked as the world's largest aid donor just six years ago. Details related to recent economic...

  • This Nation Is an Island. Caryl, Christian; Kashiwagi, Akiko // Newsweek (Pacific Edition);5/12/2008 (Pacific Edition), Vol. 151 Issue 19, p38 

    This article reports on how Japan's insularity and isolationism is affecting its economy. The article discusses Japan's history of resisting foreign investments and distance from globalization, and noting that it can no longer ignore sovereign wealth funds and international competition....

  • JAPAN IS FADING. Foroohar, Rana // Newsweek (Atlantic Edition);8/24/2009 (Atlantic Edition), Vol. 154 Issue 8/9, p28 

    The article focuses on economic conditions in Japan and that country's foreign economic relations. A flat level of economic development since 1990 means that China will surpass Japan to become the world's second-largest economy sometime in 2009-2010. Proposals to revive economic growth are...

  • TOYOTA AND THE END OF JAPAN. Stewart, Devin // Newsweek (Atlantic Edition);3/15/2010 (Atlantic Edition), Vol. 155 Issue 11, p38 

    The article presents information on the politics and economy of Japan, as of March 20, 2010. It focuses on the brand scandal involving Toyota automobiles with uncontrollable acceleration, and ties this to a larger pattern of Japanese decline beginning in the late 1980s. The question of whether...

  • Kan's Megaproblem. Scalise, Paul J. // Newsweek (Atlantic Edition);6/21/2010 (Atlantic Edition), Vol. 155 Issue 25, p18 

    An article is presented that discusses the economy in Japan following the 2010 election of Prime Minister Naoto Kan. Kan, formerly the finance minister, is facing problems with debt, welfare, taxes, and retirement. The article also discusses budget deficits, economic recoveries, deflation, and...

  • Putting On The Brakes. Caryl, Christian // Newsweek (Pacific Edition);11/7/2005 (Pacific Edition), Vol. 146 Issue 19, p42 

    This article focuses on Japan's economic conditions. In Japan, corporation profits are up, households have been buying more consumer products and Tokyo real-estate prices have moved into positive territory. These signs signal an end to deflationary woes that have characterized Japan's economy...

Share

Read the Article

Courtesy of THE LIBRARY OF VIRGINIA

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics