Nation combats deflation
Consumer inflation in the country exceeded 1%, first time over the past 5 years. This demonstrates the effectiveness of central bank policy on bringing the economy out of deflation through monetary incentives. The government plans to devalue money for another one percent, reports Star Online.
On Friday, Japan's statistical agency published a report which stated that the amount of factory production increased for the third month in a row, rising retail sales and the unemployment rate fell to a record low in the last six years. The improvement of these indicators speak of the recovery of the world’s third largest economy.
Basic consumer price index, which includes oil products but ignores fresh produce, grew by 1.2% in November from a year earlier. According to analysts, the rate had increased by 1.1%. This value is highest from October 2008, when the surge in global commodity prices increased import prices by 1.9%.
However analysts doubt whether the inflation rate is fast enough to achieve the planned level of depreciation of the national currency by 2% for two years.
р.Now the weakened yen leads to higher consumer prices. We expect inflation caused by rising costs. It remains to see how salaries will growр., says the chief economist of a large research center in Japan.
