HOUSE_OVERSIGHT_014413.jpg
Extraction Summary
2
People
8
Organizations
1
Locations
5
Events
0
Relationships
2
Quotes
Document Information
Type:
Financial research report
File Size:
Summary
This document is a Bank of America Merrill Lynch financial research report from November 18, 2016, analyzing a shift in Japan's fiscal policy towards a looser stance for FY2017. It details a JPY28 trillion stimulus package, the postponement of a consumption tax hike, and commentary from policymakers like Prime Minister Abe and BoJ Governor Kuroda. Despite the user's prompt, the document's content is exclusively about Japanese economics and contains no information related to Jeffrey Epstein.
Organizations (8)
| Name | Type | Context |
|---|---|---|
| Bank of America Merrill Lynch |
The author of the report.
|
|
| Cabinet (of Japan) |
Approved the economic stimulus package in August.
|
|
| IMF |
International Monetary Fund, cited as a source for Chart 10.
|
|
| CAO |
Cabinet Office (of Japan), cited as a source for Chart 10.
|
|
| Ministry of Finance (of Japan) |
Mentioned as being opposed to expanding the deficit.
|
|
| BoJ |
Bank of Japan, its governor Kuroda is mentioned.
|
|
| MITI |
Ministry of Economy, Trade and Industry (Japan), cited as a source for Chart 11.
|
|
| HOUSE_OVERSIGHT |
Appears as a bates stamp/document identifier 'HOUSE_OVERSIGHT_014413' at the bottom of the page, suggesting it is par...
|
Timeline (5 events)
2014
A period of fiscal tightening whose risks were initially underplayed by BoJ Governor Kuroda.
Japan
August (implied 2016)
The Cabinet of Japan approved an economic stimulus package totaling JPY28trn.
Japan
Cabinet (of Japan)
FY2017
Fiscal year in which Japan's fiscal policy is forecast to turn looser after three years of tightening.
Japan
FY2020
Target year for the Japanese government to balance the primary balance.
Japan
Government of Japan
October 2019
The planned date for the next stage of the consumption tax increase, which has been postponed.
Japan
Locations (1)
| Location | Context |
|---|---|
|
The country whose fiscal and economic policy is the subject of the report.
|
Full Extracted Text
Complete text extracted from the document (2,418 characters)
Fiscal policy: turning looser In FY17
Fiscal policy is undergoing an equally important shift. In August, the Cabinet approved an economic stimulus package totaling JPY28trn (roughly 5.5% of GDP). Though "real water" government spending is a comparatively modest JPY7.5trn (1.5% of GDP), this is enough to put the fiscal impulse back in expansionary territory, after three years of tightening (Chart 10). The stimulus measures, which are centered on public investment and cash transfers to households, should boost CY2017 GDP by 0.5ppt. Public construction orders are already rebounding as the government front-loaded public infrastructure spending (Chart 11). Meanwhile, the next stage of the consumption tax increase has been postponed until October 2019.
Fiscal policy is undergoing an equally important shift. In August, the Cabinet approved an economic stimulus package totaling JPY28trn (roughly 5.5% of GDP). Though "real water" government spending is a comparatively modest JPY7.5trn (1.5% of GDP), this is enough to put the fiscal impulse back in expansionary territory, after three years of tightening (Chart 10). The stimulus measures, which are centered on public investment and cash transfers to households, should boost CY2017 GDP by 0.5ppt. Public construction orders are already rebounding as the government front-loaded public infrastructure spending (Chart 11). Meanwhile, the next stage of the consumption tax increase has been postponed until October 2019.
Chart 10: After 3 years of tightening, fiscal policy to turn loose in FY17
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
FY10 FY11 FY12 FY13 FY14 FY15 f FY16 f FY17 f
Forecasts
Contractionary
Expansionary
■ Fiscal impulse (change in cyclically-adjusted primary balance), % GDP
Source: BofA Merrill Lynch Global Research, IMF, CAO
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
FY10 FY11 FY12 FY13 FY14 FY15 f FY16 f FY17 f
Forecasts
Contractionary
Expansionary
■ Fiscal impulse (change in cyclically-adjusted primary balance), % GDP
Source: BofA Merrill Lynch Global Research, IMF, CAO
To be clear, we are not talking about massive shifts in the fiscal stance here—the Ministry of Finance remains very much opposed to expanding the deficit and Prime Minister Abe has yet to abandon the government's long-standing goal of balancing the primary balance by FY2020.
However, there is a growing consensus among Japanese policymakers that premature fiscal tightening is counter-productive for reflation efforts, especially when monetary policy is stretched. Even BoJ Governor Kuroda, who initially underplayed the risks from 2014 fiscal tightening, has recently acknowledged that loose monetary and fiscal policies will have a "synergistic effect." The upshot is that the risk of another policy error is low, in our view. If anything, we see upside risks from greater fiscal stimulus in the form of a third supplementary budget or relatively aggressive FY17 ordinary budget. We would not rule out further delays to the October 2019 consumption tax hike, either.
Chart 11: Public investment is poised to pick up in the months ahead
30
20
10
0
-10
-20
2010 2011 2012 2013 2014 2015 2016
—Public construction orders received %YoY 3mma
—Public construction orders completed %YoY 3mma
Source: BofA Merrill Lynch Global Research, MITI
30
20
10
0
-10
-20
2010 2011 2012 2013 2014 2015 2016
—Public construction orders received %YoY 3mma
—Public construction orders completed %YoY 3mma
Source: BofA Merrill Lynch Global Research, MITI
4 Japan Economics Viewpoint | 18 November 2016
Bank of America
Merrill Lynch
Merrill Lynch
HOUSE_OVERSIGHT_014413
Discussion 0
No comments yet
Be the first to share your thoughts on this epstein document