Japan yesterday pledged huge spending cuts amounting to US$83 billion over two years as it works to bring down the industrialized world’s biggest debt mountain.
The cuts — amounting to an average reduction of more than 4 percent of current annual spending — comes days after the IMF warned again over Tokyo’s borrowings.
The moves were outlined in the government’s mid-term fiscal plan which called for cuts of ¥8 trillion (US$83 billion) between April next year and March 2016.
There were few details about where the reductions would be made, and they come after Japanese Prime Minister Shinzo Abe pledged to boost public spending to stoke Japan’s tepid economy.
Another key part of Abe’s plan, dubbed “Abenomics,” was the Bank of Japan’s huge monetary easing plan, unveiled in April, as Tokyo looks to counter years of growth-sapping deflation.
Japan’s annual budget is about ¥93 trillion, with about 40 percent of that spending coming from borrowing which has created a debt pile that is more than twice as big as Japan’s economy — the worst among industrialized nations.
The country has not faced a public debt crisis like the kind seen across the eurozone, largely because most of its low interest rate debt is held domestically rather than by international creditors.
However, the IMF and others have warned that Japan must follow through on key fiscal and structural reforms to the economy, another key plank of Abe’s plan but a difficult sell to many of Japan’s cossetted industries.
On Monday, the IMF called on Tokyo to adopt a “credible” strategy to raise sales taxes to boost government revenue and deregulate the farming sector, among others.
Meanwhile, the Bank of Japan issued an upbeat assessment of Tokyo’s efforts to counter growth-sapping deflation yesterday, as it left its vast monetary easing program unchanged.
In a widely expected move, the central bank said its board voted unanimously to keep the current package of measures in place after a two-day policy meeting.
The bank said the outlook for the world’s third-biggest economy was looking brighter, while early signs of rising prices were good news for its efforts to hit a two-percent inflation target in as many years.
“Japan’s economy is starting to recover moderately,” the bank said yesterday, pointing to better times ahead for key export markets. “Overseas economies as a whole are gradually heading toward a pick-up, although a lackluster performance is partly seen... Inflation expectations appear to be rising as a whole.”
The bank added it would continue its easing plan “as long as necessary” to hit the price target and “make adjustments as appropriate.”
The statement also points to a rise in business and public investment, private consumption and industrial production, while exports were also improving.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last