Japan's economy minister says policy needs to focus on raising productivity and wages to ensure an escape from deflation as the government prepares to announce a stimulus package next month. The economy, in the midst of its longest unbroken run of growth in more than 15 years, is showing positive signs that it can shake off the risk of deflation due to an improving output gap, said Economy Minister Toshimitsu Motegi.
However, consumer prices have been slow to rise, and Motegi says the key is encouraging more corporate investment and more spending on training workers so they can secure higher-paying jobs. "The situation is starting to change," Motegi said after a meeting of the government's top advisory panel.
"There are a lot of improvements in the economy that point toward an end to deflation. To make sure this happens, we need to focus on productivity and wages." Vanquishing deflation, or a state of falling prices that has weighed on Japan for more than 15 years, has been among the top goals of the Bank of Japan and Prime Minister Shinzo Abe since he came to power in late 2012.
Comments
Comments are closed for this article.