Japan makes the top 5 of the world’s biggest economies, so it seems that the Japanese have no reasons for concern. But in fact they do. For the first time in three years, the government downgraded the assessment of economic conditions. Probably, the consumption tax hike is to be blamed. This measure was planned a few years ago but has not come into effect yet. On the other hand, the living standards in Japan are above average and the income level is one of the highest in the world, so an increase in taxes should have a minor impact on the economy. Nonetheless, the official statement says that the Japanese economy is currently at the stage of gradual recovery, but exports and industrial output are showing signs of weakness. February’s assessment did not include such information. Furthermore, the Cabinet Office gave a downbeat outlook in March, expressing concerns over persisting sluggishness. According to the statement, attention should be paid to such factors as consequences of global trade conflicts, prospects of the Chinese economy, geopolitical uncertainty, as well as the aftermath of turmoil in financial and capital markets.
As it happens, the government delivered the downbeat assessment just as the sakura bloom season started. So, the comforting beauty of the cherry trees blossoms might probably distract the Japanese from the pressing economic problems.
