More than a year after a sales-tax increase tipped Japan into a recession, efforts to clamp down on soaring pension payments are suppressing arecovery in consumer spending.
The problem highlights how difficult it has been for Prime Minister Shinzo Abe to generate a sustained economic rebound for an economy with an aging and shrinking population – amid efforts to rein in a world-record debt load.
Welfare payments are more and more important to people’s income and pensions comprise about 80 percent of cash social security benefits in Japan.
This post was published at David Stockmans Contra Corner on September 18, 2015.
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