Sluggish consumption encumbers recovery in Japan: white paper

An economic white paper submitted to Japan's cabinet on Tuesday showed that sluggish personal consumption encumbered Japan's economic recovery.

The white paper said that Japanese people, especially wage earners in their 20s or 30s with children, were spending less in fiscal 2014 and 2015 despite the rising pay level.

It was partly due to the rising proportion of temporary workers among the employees, as temporary workers earn less than permanent employees and tend to be more frugal.

Meanwhile, the rise in prices of food and other necessities, and the tax hike since 2014 are also factors contributing to the low level of consumption.

To stimulate personal consumption, the white paper calls for narrowing the income gap between permanent employees and temporary workers.

It also suggests more flexible work regulations and improving child care services to help parents balance work and child care.

The white paper also pointed out that jobless people aged between 60 and 65 tend to spend less as they can receive neither salary nor pension payouts, and calls for new measures to help businesses extend the retirement age to 65.

The white paper also showed that equipment investment slid to some 43 trillion yen from the 51 trillion yen in 2008, though recurrent profits of enterprises reached a record high of 71 trillion yen in 2015.

Japan released a white paper on its economy and public finance every year. Endit