JAPAN’s PUBLIC DEBT

ANDINI DYAH L
1701311966
 GENERAL INFORMATION
• National language: Japanese
• Capital: Tokyo
• Government: Constitutional monarchy
– Emperor: Akihito

– Prime minister: Shīnzo Abe

• Currency: JPY Japanese Yen (¥)
 GROSS DOMESTIC PRODUCT
• The Gross Domestic Product (GDP) in Japan
was worth 4901 billion US dollars in 2013.
• The GDP value of Japan represents 7.90
percent of the world economy.
• GDP in Japan averaged 2481.74 USD Billion
from 1960 until 2013
• GDP in Japan is reported by the World Bank
Group.
 GROSS NATIONAL PRODUCT
• Gross National Product in Japan increased to
527556.60 JPY Billion in the fourth quarter of
2014 from 519955.20 JPY Billion in the third
quarter of 2014.
• Gross National Product in Japan averaged
446661.76 JPY Billion from 1980 until 2014
• Gross National Product in Japan is reported
by the Cabinet Office, Japan.
 CASE

WHAT WHY HOW

 WHAT
1. At the end of 2012, japan public debt is 997
trillion Yen. More than 200% of GDP, over
$80000 debt per capita.

2. The Japanese public debt exceeded one

quadrillion yen (US$10.46 trillion) in 2013,
more than twice the annual gross domestic
product of Japan
Graph comparing government debt to GDP of Japan to Euro Area
 WHY?
• The 2009 global recession:
Japan's government reached an agreement regarding the
financial crisis that the country is facing and has chosen to
put a stimulus package into action. The stimulus package
that Japan has put together to help stimulate the country's
decreased employment rate, give incentives for energy
efficient products, and help give loans to business owners
• Earthquake and tsunami 2011
The economic destruction of the earthquake and
tsunami was massive: 138,000 buildings were destroyed
and $360 billion in economic losses were incurred.
• Central bank of Japan printed a lot of money to get interest
rate hit its target
• Declining population
Japan population diagram in 2013 shows constructive diagram
Graph about deaths and births in Japan from 1995 until
2010
 HOW?
• Add more female labor participation in workforce
• Achieving stronger nominal GDP growth
• Three basic ways: consolidate, monetize, or
default.
– Consolidate: Japan’s government will do whatever is
necessary in order to fiscally consolidate and reduce
its annual budget deficit.
– Monetize: The Bank of Japan will be asked to pick up
more and more of the burden of buying Japanese
government bonds. Printed money will replace
corporate savings and household pension funds as the
chief source of demand for bonds.
– Default
 CONCLUSION
• DEBT TO GDP Ratio is a way to know the ability of
a country to payback its debt, the formula is:

• So if the GDP is higher than Debt it will decrease

the amount of Debt to GDP ratio. Japan needs to
focus in improving their GDP and to avoid
recession like what happened in 2014.
• Japan needs to manage their aging population,
and adding more women to workforce
 CURRENT SITUATION
• Sales tax increased from 5% to 8%. It will rise
again, to 10%, in October 2015.
• Results of Abenomics:
– Unemployment rate decreased to 3,5% from 3,6%
in February 2015, this could be a good start for
Japan in 2015 because 3,5% is considered low
comparing to 3,8% in July 2014.
– Inflation rate decreased to 2,2% from 2,4%
JPY to USD chart