Japan once again ended the year with deflation

Shibuya Tokyo Japan

Deflation in Japan for the year amounted to, net of fresh food products, 0.4 percent, its lowest level since 2009. On it informs Bloomberg. The main contribution to slowing the fall in prices has made a price hike of raw materials, which occurred in the last month.

For Japan, deflation - a common phenomenon, which occurred before the credit crisis. Among its causes are called high savings rate, the reliability of the national currency, as well as lingering in the past 20 years of economic stagnation.

To stop the deflationary process can not, even with a zero rate of refinancing, Central Bank of the country in October 2010.

Sustained deflation is dangerous to the state's economy due to the fact that increases the debt burden for borrowers, but also stimulates excessive saving, not spending and investment. All this has a negative impact on economic growth.

Data on the country's GDP should come in the next month. According to the IMF, last year the economy will grow by 2.5 percent. In 2008 and 2009 in Japan was recorded decline in the level of 1,2 and 5,2 percent.

The country's economy has a negative impact a huge domestic debt, now exceeding 200 percent of GDP (the highest in the world). Agency Standard & Poor's announced a day earlier, a decline in Japan's credit rating to "AA-". Because of such high debt levels, possible to stimulate the economy of the state budget expenditures substantially limited.