Friday, September 6, 2013
Abe Tells G-20 Leaders Japan Escaping Deflation
ST. PETERSBURG, Russia (Nikkei)--Prime Minister Shinzo Abe told counterparts from 20 major economies Thursday that the Japanese economy is steadily improving and on its way out of deflation.
On the first day of the G-20 summit, the Japanese leader addressed his economic policies known as "Abenomics" as well as the medium-term fiscal plan approved by the cabinet last month, according to an aide to Abe.
The fiscal rehabilitation of advanced economies is one of the main subjects of this year's summit discussion. At the 2010 summit, G-20 leaders agreed to halve the ratio of budget deficit to gross domestic product by 2013. Germany actually reduced its rate from 4.2% in 2010 to 0.3% in 2013. Japan was the only major advanced economy that saw its deficit ratio increase.
"Japan's public finances are in worse shape than other countries', so it is particularly important to achieve fiscal consolidation and economic growth at the same time," Abe was quoted by a Japanese official as telling other G-20 leaders.
Japan cannot put its fiscal situation on a similar footing as that of Western countries without raising the consumption tax. The prime minister did not bring up this issue at the summit, as he won't make a final decision until October on whether to go ahead with the tax increase as scheduled next April. Other leaders did not inquire about it, according to the official.
Instead, Abe told the G-20 summit: "Robust economic growth will be the largest contribution Japan can make to the global economy." Abe also stressed his intentions to implement growth-oriented policies, including tax cuts for corporate investment, the promotion of working women to senior positions, and pushing the Trans-Pacific Partnership negotiations forward, the official said.
(The Nikkei, Sept. 6 morning edition)