Japan to see out a miserable 2022 under Kishida
Kanako Mita and Sawako Utsumi
Modern Tokyo Times
Prime Minister Fumio Kishida of Japan created some grim statistics throughout 2022. Even worse, at a time of increasing economic uncertainty, Kishida now seeks to double military spending, which will further strain an already indebted nation.
By October, real wages declined by 2.6% from the previous 12 months. Thus, the cycle of mainly two decades of static wages to small growth, the rise in consumption tax, and price hikes from foodstuffs to utilities have a familiar feel about them.
Reuters reports, “Inflation in Japan is running at a 40-year high, driven by soaring energy prices from the war in Ukraine and exacerbated by a steep drop in the yen. Almost 90% of companies polled said continuing inflation was the biggest risk they faced in 2023, and 68% said it should be a policy focus for the Kishida government.”
In Tokyo (a bellwether for how Japan is doing), consumer prices in 12 months have shot up by 3.6 %. Prices of non-perishable food have risen by 6.7 % and energy prices by 24.4 % in the same timescale. This is the highest increase in four decades and sums up the current government of Japan.
Under Kishida, Japan continues to log a trade deficit month after month. Kyodo News reports, “Japan was in the red for the 16th straight month and the deficit has already ballooned to 18.51 trillion yen this year, already surpassing the 12.82 trillion yen loss reported in 2014 when the deficit hit a record high, according to the ministry.”
Despite this, along with the mountain of debt, Kishida seeks to hike several taxes to support his doubling of the military budget rather than focusing on strengthening the economy. Hence, the possibility of increasing corporation tax is another mixed message by the Kishida administration to the business community. After all, Kishida seeks wage hikes – even if they still fall below inflation – but companies are now bracing for an increase in corporation tax to support the doubling of the military budget proposed by the prime minister.
The Nikkei stock market also declined by 9.4% in 2022. Hence, another grim statistic under Kishida.
Also, the coronavirus (Covid-19) first entered Japan in the first month of 2020. However, deaths in 2022 under the Kishida administration account for 66% of all coronavirus deaths in Japan. This is despite the vaccine program and better drug treatment availability to the Kishida administration – compared to the late Shinzo Abe (killed brutally by a lone assassin) and Yoshihide Suga.
Lee Jay Walker says, “Shockingly, 94 percent of all infections and just shy of 70% percent of all deaths have happened since the Kishida leadership began. This is despite the vaccine program already being in place and the availability of better drugs. However, even when a new wave of coronavirus infections emerges, Kishida takes little action internally.”
Overall, a grim 2022 for many individuals in Japan concerning economics.
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