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2013年8月21日 (水)

デフレ状況 「なくなりつつある」は本物か

The Yomiuri Shimbun August 21, 2013
Too early to declare an end to the fight against deflation
デフレ状況 「なくなりつつある」は本物か(8月20日付・読売社説)

It would be too early to conclude that Japan is successfully combating deflation. It is essential to see whether the current price situation will lead to “a favorable price increase” to bring about stable growth.

In its monthly economic report for August, the government judged that “the state of deflation is about to end.”

The government reportedly attributed the favorable judgment to improvements in price-related indexes, including the fact that the consumer price index, excluding perishables, rose 0.4 percent in June compared with the same month last year.

Gasoline and food prices have increased in succession. Many people might have begun to feel the price increase.

Commenting on the extent of progress from deflation, Akira Amari, state minister for economic and fiscal policy, said, “Comparing it to climbing Mt. Fuji, we’re now at the Seventh Station,” showing confidence about the possibility of “reaching the summit.”

However, Mt. Fuji climbing becomes more difficult after climbers pass the Seventh Station. It is better not to naively think that approximately 15 years of deflation can be overcome easily.

The administration of Prime Minister Shinzo Abe must maintain an economy-first policy and take every possible measure to ensure that the country exits from deflation at this time.

Of concern is the fact that recent high prices are primarily caused by import price increases due to high crude oil bills and the weaker yen. Gasoline prices have topped ¥160 per liter on average nationwide and the prices of imported wine and processed foods are expected to soar.

The price of liquefied natural gas, the main fuel for thermal power generation, has skyrocketed, thereby accelerating power rate hikes.

Adverse side effects

Spikes in the prices of raw materials and utility rates have pushed up prices and created a serious side effect on business.

Businesses tend to refrain from hiking prices in an effort to prevent sales from declining, even if production and other costs soar.

If corporate performance deteriorates due to dwindling profit margins and wages do not increase, consumption will become sluggish and business performance will decline further. If “unfavorable price hikes” led by rising costs occur as a result, it will have a negative effect on economic revitalization.

Even if total salaries including bonuses have begun to improve, essential basic wages have continued to decline. If household income does not increase in line with price hikes, it will be impossible to expect sustainable economic growth.

It will be necessary to create a virtuous circle in which wages grow stably and prices rise slowly.

The government is urged to carry out its growth strategy steadily. It must step up efforts to enhance the vigor of the private sector by carrying out regulatory reforms aimed at fostering new types of industry and tax incentives for investment and lowering the corporate tax.

Companies’ internal reserves are said to top ¥200 trillion. It is vital for both the private and public sectors to redouble efforts to have corporate profits reflected smoothly in wage improvements.

(From The Yomiuri Shimbun, Aug. 20, 2013)
(2013年8月20日02時06分  読売新聞)


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