Economic Survey of Japan 2011: “The 11 March 2011 Great East Japan Earthquake was the strongest ever recorded in Japan and triggered the country’s worst disaster of the post-war era…while it is still too early to assess the full extent of the damage, the immediate impact will be to reduce output, although this will later be reversed by reconstruction efforts. Deflationary pressures are likely to remain a headwind to growth. The Bank of Japan should thus maintain an accommodative stance until deflation is overcome, paying attention to downside risks. The priority for Japan is to address the humanitarian and reconstruction needs, along with the nuclear situation. This inevitably creates the need for short-term increases in public spending. Nonetheless, in light of the debt situation, this may need to be funded by shifting expenditures and by short-term increases in revenues, appealing to the Japanese people’s sense of solidarity. The fiscal situation has reached a critical point. Chronic budget deficits were projected to push up gross public debt to an unprecedented 200% of GDP, and net debt to 115% in 2011. A credible and detailed medium-term consolidation plan that includes spending cuts and tax increases will thus be a top priority, while taking into account the need for reconstruction spending.”

• Japan’s economic outlook following the 11 March 2011 Earthquake
• Overview of the Economic Survey of Japan
• Overview in Japanese