Japan Households Save More despite Pay Growth: Govt Report
Japanese households' spending increased at a slower pace than income over the past five years, a report by the Cabinet Office showed Tuesday (February 10), indicating that people saved more amid inflation.
According to the fiscal 2025 report on the country's economic conditions, disposable income rose across all age and income groups from 2019 to 2024, but consumption growth was sluggish, with spending falling in some groups.
The savings rate increased for all groups except those in their 20s.
Lower-income households were more affected by inflation, as rising food costs accounted for a larger share of their spending.
The report said it is important for the government to implement measures to tackle inflation in order to "foster a sense of economic recovery and improve consumer confidence."
It added that the Japanese economy is "not yet in a situation where a return to deflation can be ruled out," citing weak consumption recovery.
It is important to achieve a virtuous cycle of wages and prices driven by income growth, the report said, expressing hope that productivity improvements would spread among Japanese companies with strong cost-cutting orientations.
[Copyright The Jiji Press, Ltd.]
