Japanese economy „Stagnation vs. Recovery“ Krystyna Šípošová Content • • • • • • Economic profile What caused the crisis? Slowdown factors Driving factors Positive signs for the future Conclusion Economic Profile • • • • industrialized, free-market economy currency - ¥ Japanese Yen the world's 2. largest economy after US (GNP) the 4. largest after the US, China, India by PPP • est. GDP growth I,5 % • inflation -0,5% • unemployment 4,7% Trade and industries • Exports - cars, electronic devices, computers US, China, South Korea, Taiwan, Hong Kong • Imports - raw materials, oil, foodstuffs, wood China, US, South Korea, Australia • Industries - motor vehicles, industrial and transportation equipment, electronics, chemicals, steel, machine tools, processed foods, nonferrous metals, agriculture 2% of GNP What caused the crisis? • 1980's, real estate prices soared to super inflated levels • 1989-90, burst of „bubble economy“- land and stock prices plunged • bad loans, banking crisis • 1997 - consumption tax increase from 3% - 5% Slowdown factors • decline in population, high % of elderly • low openness to foreign market high regulation, formal & informal trade barriers • lifetime employment • seniority system low productivity, high costs, high prices Driving factors • • • • • • reforms – privatization of the Jap. Post deregulation deal with non-performing loans elimination of the budget deficit stabilization of the financial system productivity-related wages, flexible labor market economic stabilization and growth Positive signs for the future • • • • • increased labor flexibility rising employment and wages growth in GDP and in consumption increasing importance of shareholder value increasing number of mergers and acquisitions Conclusion Japan had largely recovered from „the lost decade.“ (The Times) „Sun also rises.“ (The Economist) Thank you for your attention!