By Arthur Chen      攝影師：Kelly Lacy，連結：Pexels

Many countries in the world, including the United States and Germany, are facing the risk of increasing inflationary pressures. In Japan, however, there is a trend of economic deflation. In fact, Japan has been in a state of long-term stagnation or low inflation since 2001, and the young people who grew up during this period are also called the "deflationary generation." In Japan, many young people live alone in apartments of less than 20 square meters in Tokyo. They will prepare boxed lunches in advance at home, instead of directly buying instant boxed lunches sold in supermarkets or convenience stores. Unlike the previous generation, there are not a few young men who do this by themselves. The monthly expenditure is about 950 US dollars, of which about 60% is rental fee, food accounts for 20%, and other aspects of consumption left not much.

Because of less inflation expectations, overall social consumption has shrunk, leading to decline in corporate income so as to decrease in personal income which go further exacerbating the consumption downturn and triggering a vicious circle. Since the late 1990s, Japan's GDP has been hovering around 500 trillion yen (approximately USD 4.55 trillion) for a long time. The economic downturn accompanied by deflation has shaped the sluggish consumption pattern of Japan's "deflationary generation".

In terms of overall economic theory, governments of all countries hope to maintain the inflation rate at a healthy figure around 2% per year, so that people’s income can slightly increase every year. Manufacturers can also increase their income and government taxes be staying normal to keep healthy economic conditions. The current inflation rate in the United States has been higher than 5% for several consecutive months. Of course, one of the reasons is the lockdown caused by the 2020 pandemic, so the consumer price index ratio is at lowest level so that the base figure should be low compared with 2021. The result is the economic inflation rate relatively be high. But what must be paid attention to is the substantial increase in international and domestic logistics costs which also push up the inflation rate to be hanging at a high level. At present, under the guidance of the economic policies of the Biden government and the suppression of the Chinese government, the prices of bulk raw materials such as oil, iron ore, steel, etc. have begun to trend downwards. Coupled with the reduction of liquid assets and the increase in interest rates in the future to dominate economic trend, however, if it still unable to depress the inflation rate then a terrible situation shall be acting as Japanese economic stagnation and deflation in the past 20 years. In brief, a losing control of the inflation rate will lead to deflation and conservative consumer behaviors. Manufacturers are unprofitable, and a vicious circle of rising unemployment follows. Of course, there are multiple factors for this result to happen together. The current high ocean freight rate is one of the reasons that directly related to inflation, and governments of all countries have to deal with it carefully.

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