This 2009 edition of OECD's periodic review of Japan's economy includes chapters on overcoming the global crisis, improving the efficiency of the banking sector, the fiscal response to the crisis and fiscal sustainability, health care reform, and the climate change policy framework.Click to Access:
- 13 Oct 2009
Overcoming the global crisis
the need for a new growth model
Click to Access:
Despite its limited direct exposure to the global financial crisis, Japan’s exportdependent economy has fallen into its deepest recession of the post-war era. Prompt actions to stabilise financial markets, provide a large fiscal stimulus and cut interest rates are projected to lead to positive output growth in the second half of 2009. However, the pace is projected to remain sluggish at less than 1% in the context of a protracted recovery in world trade that will limit Japanese export growth. Meanwhile, fiscal consolidation will become a priority as the gross public debt is projected to reach 200% of GDP by 2010. Sustaining output growth must depend increasingly on boosting private domestic demand, requiring economic reforms, particularly in the labour market and the non-manufacturing sector. The key objectives should be to stem labour market dualism, which puts downward pressure on wages, and to pursue regulatory reform, particularly in services, to increase productivity.