Personal consumption, which accounts for more than half the nation's gross domestic product and is an important locomotive of the economy, has been sluggish. Short-term factors behind the sluggish consumption are the termination of subsidies for the purchase of eco-friendly cars and the scaling down of the eco-point system for electric appliances.
Economists estimate that Japan's GDP in the last quarter of 2010 suffered negative growth. Despite stimulus measures of the fiscal 2010 supplementary budget, the economy is expected to remain stagnant in the first quarter of 2011. It is generally believed that it will start picking up in or after spring.
There is a much more important issue than the short-term economic recovery that must be tackled. Attention must be paid to a problem that cannot be solved by stimulus measures and that causes people to fret about their future, thus negatively affecting the economy. The issue is Japan's weakening social welfare system.