The post Japan is now deep in stagflation, and it might only get worse from here appeared on BitcoinEthereumNews.com.

Prices in Japan are blowing up while the economy is tanking, and the government looks like it’s scrambling to keep up. Inflation is smashing records, growth is going backwards, and people are stuck in the middle of both. According to analysts at Bloomberg, the country has officially slid into stagflation, a nasty mix of rising costs and slowing output that hasn’t hit this hard in decades. The price of rice shot up 98.4% year-over-year in April, the fastest spike since 1971, following a 92.1% increase the month before. At the same time, energy costs rose 9.3%, after government subsidies for gas and electricity were phased out in March. Inflation gains speed while growth shrinks The consumer price index, excluding fresh food, jumped 3.5% compared to last year, rising from 3.2% in March. This is the fifth straight month inflation has stayed above 3%. But while everything is getting more expensive, the economy is shrinking. Japan’s GDP fell 0.7% in the first quarter of 2025, the first drop since early 2024. On an annualized basis, the economy slipped 0.3%, based on median estimates from economists. This slide is showing cracks that formed even before the US tariff measures kicked in fully. Toru Adachi, an economist, said, “Japan is having its own version of stagflation. Consumer spending isn’t robust enough to support a moderate recovery on the whole.” And with numbers like these, there’s no recovery in sight yet. The pressure is hitting politics too. Prime Minister Shigeru Ishiba, who took office in October, is seeing his approval ratings crash to new lows. The sharp inflation has made everything worse for him as he heads into the summer upper house elections. A poor economic print will only push the ruling party closer to rolling out a new stimulus package, which many are…

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Filed under: News - @ May 25, 2025 7:18 pm