RHB | Japan | A Sectoral Lean through 2025

Economic Research	01 April 2015
JAPAN
Economic Highlights
A Sectoral Lean through 2025 The sectoral financial balance data for Japan, which links the corporate (nonfinancial and financial), households (and nonprofit), general government and external sectors, offers a simple and coherent framework for considering a range of relevant issues. By definition, a financial deficit reflects excess investment (or net borrowing), while a financial surplus denotes excess net savings (or net lending). The latest annual sectoral data for fiscal year (FY) 2013 (starts on April 1 and ends on March 31) shows that the combined financial surpluses in the corporate and household sectors were more-or-less equivalent to the financial deficit in the government sector of roughly 7% of GDP. As a result, the external financial balance (as a % of GDP), which corresponds inversely to the current account ratio, was almost flat on average in FY 2013. Arithmetically, all the sectors combined--the financial surpluses and deficits (calculated from the difference between all financial assets and liabilities in the respective sectors)--must sum to zero. Economist:  Thomas Lam  | +65 6533 0389
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