Japan inflation falls to zero for third time

For the third time this year, the Japanese government was unable to move its inflation rate.

According to the data by its national Statistic Bureau, the consumer price excluding fresh food remains unchanged from last year and this means that Shinzo Abe's government failed to hit the official target of 2 percent.

At this rate, the Statistics Bureau predicted that the inflation rate will only increase up to 0.9 percent in the next 10 years.

The labour market report also shows that the unemployment rate fell to 3.3 from 3.5 percent in February this year according to Bloomberg. However, a sense of relief can be felt by the government because the inflation rate did not turn negative as expected by some economist.

After last year sale tax hikes, it seems that the consumer household spending fell as reported in July forcing Japan's bank to take a more aggressive effort to re-inflate the economy. This latest news means new tax increase currently planned by the government need to be put on hold first.

The report is a shocking news for the government since they had taken a step to increase the average wage for government worker, however the data suggested that it still unable to encourage the Japanese to spend more as household spending did not increase.

However retail sale increased up to 1.6 percent this year although household spending is still unchanged, this signifies that there is still some hope to turn the situation around.

To curb the same problem from occurring, the International Monetary Fund is suggesting for the government to cut its budget or they might end up with huge debt by 2030 as reported by The Japan Times.

Most of the government budget was spent on Social Welfare to take care of the elderly people in Japan as the country took a really good care of their citizen. Currently, the economist had also considered other plans such as monetary easing as one of government's plan to curb this problem to make sure that the citizen can still afford for their medical expenses in the future.

With the economic uncertainty thanks to China, Europe debt problem and tumbling oil price, Shinzo Abe need another economic revival plan. China, one of Japan biggest trade partner is having a slowdown in their economic had also affected Japan's economic since their import to China makes up around 18.3% of last year total shipment.