Getty Images If on the one hand many countries, such as Brazil, battle to keep inflation under control, Japan lives an opposite reality. Over the last decades, the archipelago has faced deflation. In other words, a generalized fall in prices in the country. And has been implementing measures to guarantee that inflation stays within the target.
At first, price stability may seem beneficial, but it reveals that supply is greater than demand, which is not the ideal scenario. In the long run, this can slow down the economy, leading to business closures, unemployment and lower incomes, as well as driving away investment.
The current complaint of the Japanese is that the cost of living is high and wages are stagnant, making it difficult for families to see an improvement in their lives. As a result, not only the families, but also companies, tend to avoid spending, preferring to leave the money in the bank, even without gaining any income on it.
Experts believe that the country is turning its economy around. With a policy to stimulate the economy and a global economic scenario of inflation, in April, Japan recorded an inflation rate of 3.5%, above the 2% target, but lower than the 4.2% reached in January, the highest rate since 1982.
Source: Estadão and G1
<GLOSSARY>
Deflation:
Generalized fall in prices. Normally occurs when people are buying less or the supply of products is bigger than the intention of people to buy – the opposite of inflation.
