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13 Jan, 2023 06:03

Japanese cut spending amid highest inflation in 40 years – survey

A record number of households in the world’s third-largest economy say they’ve been hit by price hikes, the Bank of Japan reports
Japanese cut spending amid highest inflation in 40 years – survey

More than half of Japanese households have experienced worsening living standards as a result of soaring inflation, the latest survey conducted by the Bank of Japan has shown.

In its quarterly report, the BOJ said 53% of people surveyed admitted that their wealth had slumped last year compared to 2021, while only 3.7% said their livelihood had improved. This is the highest percentage of households reporting financial problems in almost 13 years.

The report indicates that consumers will be unwilling to increase their spending without growth in wages as a record 63% of respondents named inflation as a decisive factor for their spending activity this year.

Data shows that price growth is spreading across various sectors of the Japanese economy and companies are passing on the burden of rising costs in energy, food and raw materials to households. Aside from utility bills, prices rose for a broad range of goods from fried chicken to smartphones and air conditioners in a sign of mounting inflationary pressure.

In December, price growth in Tokyo exceeded forecasts and reached 4% for the first time since 1982, data from Japan’s Ministry of Internal Affairs showed.

The Bank of Japan also expects that prices will continue to rise and has doubled its inflation forecast for the coming year to a record 10%.

For more stories on economy & finance visit RT's business section

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