Japan economy will grow more than expected: Business body | Current Affairs, Current Affairs 2017

Japan economy will grow more than expected: Business body

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Japan economy will grow more than expected: Business bodyJapan Business Federation chairman Sadayuki Sakakibara has expressed his confidence that the country’s economy will grow beyond expectations in 2015.

In an interview with the Nikkei daily published Friday, Sakakibara also reiterated the organisation’s intent to push for wage increases of more than 2 percent.

“Private sector think tanks on average project economic growth this year to be in the upper one percent range, but I think it will do better,” he said.

The Bank of Japan in its last quarterly report also put the country’s average economic growth rate for 2015 at 1.5 percent.

The head of the economic organisation attributed his optimistic forecast to the Japanese corporations’ strong performance propelled by the continued fall of the yen against the dollar and said that the delay in the (consumption) tax hike would give the economy a boost.

In November, Prime minister Shinzo Abe decided to postpone until April 2017 implementation of the second stage of the sales tax hike that was supposed to take effect in October this year.

This was done on account of the dampening effects of last April’s increase in the sales tax on the country’s consumption, the driving force of the world’s third-largest economy.

“I want this year to be the year when Japan undeniably escapes deflation and gets on track to economic recovery,” said the chairman, adding: “The business community will make every effort to raise wages, and we will make this stance clear in our guidelines for the spring wage negotiations.”

“We will call on companies to consider the option of increasing base pay. Wages increased by over 2 percent for the first time in 15 years in fiscal 2014. We are hoping for similar figures this time around.”

He also spoke about the organisation’s call for an increase in the ratio of nuclear power in Japan’s power generation to “above 25 percent by 2030”.

All nuclear reactors in Japan were halted following the accident at the Fukushima plant in 2011.

However, many nuclear power plants have applied for reactivation and two of them are expected to begin operations again this year, a decision that, according to polls, is opposed by more than half of Japanese questioned on the issue.

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