Deflation inflation debate Japan's version

Deflation feared as wholesale prices dip

Wholesale prices drop 2.2 percent from a year earlier for the sharpest fall in nearly seven years due to falling demand amid the weakening of the economy, fueling deflation fears.

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For full article go to .: Stimulus called costly, short-term fix

http://www.japantimes.co.jp/

Tuesday, April 14, 2009
ANALYSIS

Stimulus called costly, short-term fix

By KEIKO UJIKANE and TORU FUJIOKA

Bloomberg

The plan unveiled Friday by Prime Minister Taro Aso, who faces a general election this year, is aimed at creating jobs in an economy heading for the worst postwar recession. Equal to 3 percent of gross domestic product, the measures will add to debt that the Organization for Economic Cooperation and Development already forecasts will rise to 197 percent of GDP next year.

"The stimulus will probably prevent Japan from falling apart in the short term, but it will leave a massive bill for the future," said Hiromichi Shirakawa, chief economist at Credit Suisse Group AG in Tokyo. "

The debt burden will be borne by a shrinking population that will be hard-pressed to keep the economy growing fast enough in years to come, said John Richards, head debt-market strategist for the Asia-Pacific region"Royal Bank of Scotland PLC in Tokyo."