Japan is bucking the current austerity trend of
other developed economies by providing a strong
fiscal stimulus in conjunction with monetary policy
expansion with the aim of reviving economic growth
and curbing deflationary trends. An increase of
government spending on infrastructure and social
services, including health care and education, has
been announced, to be accompanied by efforts to
boost demand and structural policies oriented towards
innovation and investment. To complement these
efforts, in April 2013 the B ank of Japan announced
that it will increase its purchase of government bonds
and other assets by 50 trillion yen per year (equivalent
to 10 per cent of Japan’s GDP) in order to achieve an
inflation target of 2 per cent. O verall, these measures
could help maintain Japan’s GDP growth at close to
2 per cent in 2013.