Japanese Economy: The Kovid-19 epidemic had an impact on many countries around the world, but now the situation is improving. Last year, GDP in Japan recorded negative growth in the January-March and July-September quarters, but in April-June it grew by 4.5 per cent annually as compared to the previous quarter. The debt of many countries including Pakistan, Sri Lanka has been discussed, but it is also true that Japan also has a huge debt. In the last days of September last year, the amount of debt on Japan was 9.2 trillion dollars. This amount is 266 percent more than its GDP.
If we talk about the amount of debt on America, the world’s biggest economic power, then it is known that it is about 31 trillion dollars. However, it is a matter of great relief for America that this amount is only about 98 percent of the country’s GDP.
huge debt on japan
The biggest reason behind the huge debt on Japan is that in order to maintain the pace of its economy, the country spent more money in domestic expenditure for years. According to a BBC report, according to Takeshi Tashiro, Senior Fellow of ‘Peterson Institute for International Economics’, people in Japan save more, while investment is less. That’s why the demand is very weak here. In such a situation, the need for ‘economic stimulus’ is felt from the government.
high health spending
According to Takeshi Tashiro, a major reason for this problem is the population situation in Japan. The people of Japan want to live longer. In such a situation, more is spent on social security and health. It is believed that people in Japan are more apprehensive about the future and place more emphasis on savings.
The country survives after being in debt
Japan is the most debt-ridden in the world, but the interesting thing is that the economy is stable due to the strong confidence of foreign investors. The debt burden on Japan started increasing in the 1990s. It is said that during this period the condition of financial and real estate business was very disappointing. According to statistics, in the year 1991, the GDP and debt ratio was only 39 percent. After this the economy of the country kept on declining.
compulsion to increase expenditure
Due to the decline in the economy, the income of the Japanese government decreased and there was a compulsion to increase the expenditure. By the year 2000, Japan’s debt became almost equal to its GDP. In the year 2010, the amount of debt almost doubled from GDP. In the year 2011, the earthquake and tsunami had a serious impact. After that, the economy was also greatly affected by the recent Corona epidemic. In such a situation, there was a need for economic incentive.
How did Japan get loan
Bonds were sold to meet the necessary expenditure in the matters of education, health and defense between the economic recession to the Corona Pandemic so that the expenditure in these areas could be met. One of the major reasons behind getting Japan’s loan was that the country never proved to be a defaulter. Secondly, the loan was received through government bonds at very low interest.
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