FY policy: When the economy is in recession, the State can reduce taxes, increase spending (public investment) to fight. Fiscal policy so as to loosen fiscal policy.Conversely, when the economy is in inflation and have a hot phenomenon, then the State can raise taxes and reduce its spending to prevent the economy from falling into a State of overheating leading to breakdown. Fiscal policy like this is to tighten fiscal policy Head of Japan's public debt is the debt ratio up to 4.5% of GDP, increased 243.5 percent of GDP compared to the year 2012Japanese government debt is currently ranked first in the world with more than 13,000 billion dollars, the equivalent of 230% of GDP (2013). When deflation of prices leading to asset deflation, followed by a series of other losses caused the economy to fall into recession.In addition to anxiety deflation, Japan is also faced with economic challenges, especially the rise of the yen. Particular quarter-2013, compared to the rate increased 6%. Typically, prices went down in strong currencies. By then, the yen rising prices make absolute profit and the rate of profit of the enterprises in Japan declined, Japan's companies have trouble more when competing in foreign markets.* the fiscal policy to fix its economy, Japan in 2013:-First, the aggressively eased monetary policyThe top priority of the Japanese Government's policy of "Super relaxed" monetary and fiscal spending. April 2013, the Central Bank of Japan (BOJ) announced the policy "to continue monetary easing in number and quality". With that, the BOJ has applied the "monitor base currency" to pursue quantitative easing. BOJ agreed to increase the number of currency circulating on the market with an annual rate of about 60,000-70,000 billion yen (equivalent to 583-680 billion dollars, accounting for about 13%-15% of the GDP of Japan). The consumer price index (CPI) rising forced the BOJ to continue enforcing strong monetary easing policy further aims to bring prices back up and protect the economy due to the harmful effects from the strong yen policy. The loosening of the currency could cause deflation in favour of positive inflation average in Japan eased monetary policy be implemented in conjunction with the financial measures such as strengthening buying Government bonds, the high-risk financial assets as investment trusts. By 2014, the Bank of Japan began buying back is not limited to Japanese Government's bonds totalling 13,000 billion yen (about 146 billion u.s. dollars). The pumping money into the economy will inevitably result in prices falling fast, put the target inflation up 2% (2014-2015). Base amount (including cash in circulation and deposits of other financial institutions) in the BOJ will upgrade to double, over 270,000 billion yen (equivalent to 2,800 billion) by 2014.Second, the focus of investment for the private sectorThe Japanese Government pledged to promote private sector investment and activity of the enterprise aims to end deflation lasted nearly two decades at the third largest economy in the world.Development strategies to promote private investment and consumption, comes up with plan to spend 117 billion in the economic stimulus package is seen as Japan's biggest since the global financial crisis of 2008. The objective set for the BOJ is doubling of inflation around 2% in the period 2014-2015.Third, promoting activities of businessesJapan's target is to increase the total investment capital for the business by 10%, to about 70,000 billion yen in the period (2013-2015); increase of per capita income (currently 3.84 million yen in FY 2012) more than 1.5 million yen in the period (2013-2023). Efforts to promote reform in economic development with the proper policies to invigorate the running of the business as the business tax reductions; establishment of special economic zones and emphasized the role of the private economic sector in promoting economic growth in General.To promote reform of the electricity sector, the Government will increase investment for sectors related to the electricity sector up 30,000 billion yen, an increase of 1.5 times as compared to 2010. In addition, the Government aims to boost more exports of enterprises operating in the fields of infrastructure, up 30,000 billion yen and doubled, and over 1,000 billion yen turnover in food and agriculture by 2020.Wednesday, increasing public spendingWhen the study of deflation in Japan, leading economists have pointed out that the best way to combat deflation is to start a massive stimulus package and quickly. By 2012, Japan officially announced new economic stimulus package of up to 20,200 billion yen ($ 226.5 billion) to the economy. This is the biggest economic stimulus package by the Japanese Government since 2008 with the aim of bringing Japan out of deflation constant. Some 20,200 billion yen of stimulus package, there are 11,300 billion yen due to the Central Government level. The rest by local governments and the private sector to contribute. This is the biggest spending package by the Japanese Government aims to create sustainable economic growth through encouraging private investment, strengthen the international competitiveness of Japanese companies as well as promote reconstruction program after the earthquake-tsunami (2011). This economic stimulus package contributed to increased pressure for the Central Bank of Japan to loosen monetary, prevent the rise of the yen makes Japanese exporters were difficult due to commodity decreases the competitiveness on the international market.May 02-2013, Japan adopted the supplementary budget draft 13,100 billion yen (about 140.7 billion dollars) aimed at pulling the economy out of recession because of deflation. The addition of the budget would help Japan more resources to put an end to deflation and help create at least 600,000 new jobs. Account this additional budget includes spending for public projects to repair transport infrastructure: the tunnels and bridges. Assist the company to use means of saving energy and boosting infrastructure investment in factories. Allows the Government to continue spending to pay basic pensions.May 2013, Japan continues to trigger huge budgets 92,610 billion yen ($ 906.2 billion dollars) to focus on public works to create blow seven areas up the economy. BOJ will inject more 1,400 billion dollars into the economy in the period 2014-2015 to end economic stagnation for over two decades. The Government's efforts contributed to the value of the yen falling (pass the landmark 100 yen/USD), the lowest in four years. The yen rising prices a boon for exporters, the confidence of investors is gradually restored. Cash flow strong rotation starts.On Thursday, an increase of sales taxCurrently, Japan's sales tax at the rate of 5%-the lowest of the industrialized countries. While in Europe, the tax of up to 20%. Japan's tax revenues currently only reaches 17% of GDP – the lowest level of the members of the Organization of cooperation and economic development, OECD. Japan's target is to double the tax on consumption (currently 5%) and rebuild the social security systems in order to cut public spending in the context of population ageing more quickly. According to the plan, the consumer tax will rise from 5% to 8% in April 2014 and up 10% in December 2015. In the context of escalating debt crisis, the population is increasingly elderly and social security costs soar, the increase in consumer taxes would enable Japan have a chance to keep its growth rate and reducing the budget deficit.According to the Economist, Japan-Japanese, Nishibori said should increase the sales tax, but divided in ten years with the increase of 1% per year. With this method, will not only avoid giving consumers a sudden shocks but also reverse the deflation by creating predictable psychological inflation. According to him, this approach not only to mitigate the effects on consumers but also curb deflation by creating expectations of inflation. In principle, consumers would cut spending if tax suddenly increased to 10%. But when it rises slowly and are forecast to continue to rise, the people still spend as usual.Some reviews, reviewsThe economic policies of Prime Minister Shinzo Abe has worked cause the Japanese economy to recover quickly. With 3 policies (including monetary policy, strong, flexible fiscal policy and growth strategies to encourage private investment), the Japanese yen has reduced prices, export recovery, industrial output has increased by 1.7% (4/2013) compared to the previous month, marking the fifth consecutive month of increase. Gross domestic product (GDP) of Japan in the first quarter to 20
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