Posted by – July 13, 2011
As Japan struggles to rebuild after the tsunami and earthquake it is becoming apparent that their economy is far from stable. The substandard GDP and costs to rebuild make getting the economy back up to world standards a difficult task.
What are the costs of rebuilding after a succession of natural disasters?
- According to an article in the New York Times, the costs to rebuild the northeast region of Japan are so large that lawmakers are planning to double the national sales tax to 10 per cent.
- Government estimates say rebuilding will cost as much as $312-billion.
Japan’s economy should not rely on debt financing to pay for the reconstruction costs because they have the highest level of public debt among advanced economies. It is likely that Japan will have to cut spending costs and raise taxes to keep up with interest payments.
Read the rest of this article
Imports and exports fell in Canada, causing its trade deficit to double in a month. Some relevant statistics from StatsCan include:
- The trade deficit widened from CDN$417 million in March, to CDN$924 million in April.
- In April, exports fell by 1.9 percent, volumes decreased by 1.1 percent and prices fell by 0.9 percent.
- Imports fell by 0.6 percent, volumes increased by one percent and prices dropped 1.5 percent.
- Exports to the USA increased by 0.3 percent and imports rose by 1.7 percent, narrowing the surplus by CDN$300 million.
- Exports to countries besides the USA fell by 7.9 percent and imports fell by 4.1 percent, widening the deficit by CDN$200 million.
StatsCan reported that the decrease in volume was due to a slow month in the machinery and equipment sector. The automotive and industrial sectors contributed the the declining export prices. Automotive imports had the greatest decline due to the tsunami and earthquake in Japan.
For the full article, head to the Globe and Mail.
Other reports on the economy include:
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