The economy is on the verge of emerging from nearly two decades of deflation as it has picked up since the beginning of the year, a government report said Tuesday, emphasizing positive aspects of Prime Minister Shinzo Abe's "Abenomics" policies.
The economy, which has been trapped in a prolonged period of deflation, "has shown signs of turning around," said the white paper on the economy and finances for fiscal 2013 released by the Cabinet Office. It added that "consumer preference for lower-priced products has been waning."
Deflation pushed down real gross domestic product by around ¥8.5 trillion for three years from fiscal 2009, as an upturn in real interest rates made companies and households reluctant to take out loans to boost investment, the report said.