Rapid reactions of economists after the BNR decision: “Recession is the basic scenario. The external short -term debt is as much as the foreign exchange reserves”. The case of Japan

Shortly after the NBR published the decision of monetary policy, the economists sent their first reports, not at all optimistic.

BRD, whose estimates have had a high degree of accuracy over time, says that the recession is the basic scenario for 2025, the estimated economic decline being between 0.6-1.4% of GDP. They also warn on the increase of the short -term external debt at a level close to the international currency reserves.

Even the central bank speaks of an increase of inflation with a “broad jump in the third quarter 2025, under the transient impact of the expiration of the scheme of capping the electricity and increase of the VAT quotas and excise duties.”

BCR speaks in his report on a declining review of GDP growth throughout the year, without announcing the new growth estimate.

“We estimate that inflation will enter the range [7.0%, 8.0%] in T3'25, with an increased probability to reach the upper limit of the interval at the end of the quarter. Subsequently, in T4'25, in an optimistic scenario, inflation will stabilize in the mentioned interval. However, if the rising risks materialize, inflation could climb to 9% -10% by the end of the year, ”the BRD report shows.

The tips that the Japan press gives to the population to defend inflation

To protect us from inflation, writes one of the most influential Japanese newspapers, there are two strategies: to cut from expenses and to increase the incomes simultaneously.

How we reduce the expenses:

Reduce living costs by saving money. For example, marrying!

What can you actually do to reduce your spending? One of the ways is to move alongside other friends or acquaintances. If you are alone, you can marry and live with your husband/wife.

Long ago, it is often said that “a person does not allow one thing, but two people allow it.” And looking at the data from the Statistics Office, those regarding the investigation of household budgets, they look like this:

• Total consumption expenses of one -person households: 155,048 Yeni
• Total consumption expenses of households with two or more persons: 279,024 Yeni

Even if there are two or more people, these expenses do not double, but increase 1.8 times. It is a simple calculation, which shows us that living in the couple actually saves the expenses.

Divide costs with friends/neighbors. Go to the seniority market, not to the mall

The concept of “sharing”, in which the housing and cars are shared and used, is a way to save money.

Initially, the idea of “shared economy” is a new lifestyle in which goods and services are divided by a platform that uses smart technologies.

The space (home sharing, car sharing, bicycle sharing) can be used, the skills (household, cooking), money (crowdfunding), goods (seniority market, rental services), etc., thus responding to the new inflation era.

Think about the price of food, such as oil or wheat, is raised against the background of Ukraine. Including in Japan, there is no doubt that prices for petrol, utilities, transport, logistics will increase even more. If the prices increase and the salaries do not increase because of the recession, you have only to reduce the expenses.

You also have the option of moving to a country or region where prices are lower, if you work remote. But that depends on how much the yen is depreciated. If the yen depreciates to the level of 150 or 200 towards the dollar, it will become difficult to move over the seas. There are countries in the world where prices are lower than in Japan, but unfortunately, in such countries and the standard of living is much lower than us.

Three ways to increase our income

1. Find a second job. Due to the spread of pandemic, distance work has become common. We recommend life in the rural area. We know, even if you have a vegetable garden at home, it is difficult to maintain it without experience and skills. There are many inherent risks in the rural area. There are cases where costs increase, and you have to think well if you want to move there just to cope with inflation.

2. Looking for a better paid job. The income from secondary business is about 60,000 yen per month. 30% of the Japanese have already applied for a part-time job. As the time required for the shuttle has decreased, it can be considered that obstacles to obtain a secondary job have become smaller.

How much can you actually earn a month from your secondary business? According to “Survey On Side Job Awareness” of the Socin Research Institute, the average monthly income of a secondary job is 68,200 yen. According to a Mynavi survey on the change of career, the average income of those who do it is 59,782 yen (questionnaire made in November 2020). In other words, 50,000 to 60,000 yen per month would be a reasonable income.

There is also the possibility of becoming independent and starting a business. Our perception of being related to a single company and to work there until retirement is a rarity in the rest of the world.

3. Take risks and invest. If you hold your money in the bank they will soon evaporate. The financial literacy program started in the April school education. Not only the pensioners, but also the young people must handle their money in an era of inflation. People who take no risk never save. There are, in practice, three main types of investments: in actions, in bonds or specialized funds. Start with small amounts. In an era of inflation, excuses like “I didn't know” and “I don't want to take risks”.