Japan’s growing debt overhang adds to zombie threat
Business failures in Japan have been stemmed thanks to massive government and bank liquidity support. However, there’s mounting concern regarding debt overhang: A survey of small firms shows that 34% find their debt excessive and that 14% already had excessive debt prior to the pandemic.
What you will learn:
- Some evidence of debt overhang and a rise in zombie firms.
- Relatively healthy small firms will voluntarily close business.
- Debt-overhang and zombies will weigh on bank profitability and productivity.
Tags:
Related Services
Post
Adopting the Limited Trump Scenario as the new baseline
Following the outcome of the US elections, we have adopted our 'limited Trump' scenario as our new baseline forecast. Our new baseline assumes a Republican-led Congress extends the personal tax cuts under the 2017 tax law and enacts higher spending levels.
Find Out MorePost
EV shift could pose a big challenge to Japanese economy
Amid the fast-progressing electric vehicle (EV) shift, maintaining high competitiveness in auto-related sectors and ensuring a smooth labour transition across industries are crucial for the growth of the Japanese economy. As auto production shifts towards EVs, which require different inputs from traditional internal combustion engine cars, parts suppliers will need to adapt to avoid losing market share to foreign players. Change in automotive supply chains would also require workers to move across different industries, a task particularly challenging for Japan.
Find Out More