BBC News – Japan’s savings rate turns negative for first time.
For the first time since records were collected in 1955, Japan’s population is drawing down its savings and the savings rate, calculated as savings divided by disposable income plus pension payments, was negative 1.3%.
It’s a dramatic change from when the Japanese saved nearly a quarter of their income (23.1%) when the savings rate peaked in 1975.
Japan had the highest household saving rate in the OECD in the 1960s until it fell to the lowest. After all, an aging population draws down savings and Japan is the fastest-aging country in the world; its population has been shrinking for a decade.
It’s another blow to the Japanese Prime Minister Shinzo Abe, who just won another term to try and implement his policies dubbed Abenomics. On the campaign trail, he said that Abenomics aimed to raise wages and employment to revive the economy and defeat deflation or price falls.
Yet, earnings (adjusted for inflation) dropped 4.3% from a year earlier in November. It’s the steepest decline since the 2009 global crisis and marks the 17th month of falls.
