Japan Economy: more and more dependent on China, slow growth ahead, inflation to get out of deficit

Jesper Koll, chief economist of Merril Lynch, was giving his annual Japan economy forecast speech at the ACCJ on February Friday 4. Among his main messages were:

- Japan economy is more and more dependent on China. China is the most important export market for Japan

- Japan GDP growth will be slowed by both:

- tax increases that will represent about 2TY for the next 3 years

- poor demographics that will see the baby boom high paid generation retir, only partially replaced by less numerous, partially employed younger generation with much lower paychecks

- Japan government budget and debt (150% of GDP) is becoming preoccupant and Dr. Koll predicts inflation will probably the way out.

Eric Perraudin, Managing Partner JMC.