Business & Economy

Japan CPI falls 0.2% in 2020, 1st contraction in 4 years

Tokyo, Jan 22 (efe-epa).- Japan’s consumer price index (CPI) fell 0.2 percent year-on-year in 2020, the first annual contraction of the indicator in four years, the government said Friday.

The evolution of the index, which excludes fresh food prices due to their high volatility, is far from the 2 percent inflation target set by the Bank of Japan (BoJ), although it is in line with the pessimistic outlook forecast by the entity for this year due to the Covid-19 pandemic.

In its most recent economic forecast report, published Thursday, the Japanese central bank estimated a fall in the CPI of 0.5 percent for the 2020 fiscal year, linked to the impact of Covid-19, which is reducing the levels of domestic consumption, a key pillar for the economy of the archipelago.

Japan had closed 2019 with an inflation of 0.6 percent.

The sectors that contributed most to the CPI’s decline in 2020 were the cost of education (-7.8 percent) and of fuel, water and electricity (-2.4 percent), according to data published by the Statistics Bureau of the Ministry of Internal Affairs and Communications.

On the other hand, the sharpest increases were recorded in the prices of furniture and household goods (2.3 percent) and food (1.4 percent).

During the month of December 2020, prices in Japan fell by 1 percent, representing the fifth consecutive month of decline in the indicator.

The CPI fell 0.9 percent in November.

The sectors that contributed most to the contraction of the indicator in the last month of 2020 were energy (fuel, water and electricity), which declined 6.1 percent year-on-year; and culture and leisure, which decreased by 4 percent compared to the same month of the previous year. EFE-EPA


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