money and money supply in the economy
Present economic condition of Japan
Early 2011, Japan was hit by a
catastrophic earthquake that led to its output contraction by 0.5 percent, slow
import growth at 1.9 percent and GDP reduced by 0.5 Percent at the end of the
year (“Trade growth to slow,” wto.org).
As the nation tried to recover from the
natural disaster, Thailand’s flooding hindered the structure of supply chain,
considering that Thailand is a key supplier of manufactured inputs. Japan
economy is currently at the state of reconstruction where the government is
taking enough measures in controlling public spending to generally support
economic pick- up growth in by the end of the year. According to the OECD, “The
government plans to spend a total of around 19 trillion Yen (about 4% of GDP)
over five years for reconstruction…..Three packages and the FY 2012 budget
containing a total of around 18 trillion Yen of reconstruction spending have
been approved” (71).
Employment is expected to change
positively from 2011perfomance as individual and businesses stretch out for
recovery. The government however, has to plan for budget deficit that would
follow in the process of slicing other ministries for reconstruction purposes.
The deficit is projected to rise to 10 percent this year and the next, which
will consequently push the economy to a gross public debt of over 220 percent
of GDP risking its stability (OECD 72). Financial institutions amongst the Bank
of Japan have been working close with the government in Japan’s economy
recovery. The policy interest rates have been reviewed and the bank has kept it
almost at zero value and at the same time announcing its aim as one percent
annual change in CPI to stabilize price and as a way to end deflation.
The affected relation between China
and Japan after the territorial dispute over Senkaku islands has impacted
negatively on Japans auto market, which may lead to the industry not achieving
its target by the end of the year.
OECD. OECD Economic Outlook Vol.2012/1. Paris: OECD Publishing,
2012. ilibrary. Web. 4 October, 2012.
inflation in the UAE
interest rates in the UAE
commercial banking
interlinking of global economies
European crisis
