"Rapidly Increasing Government Debt as an Inflation Risk Factor"

[Asia Economy Reporter Yujin Cho] Bloomberg reported on the 21st (local time) that the unprecedented fiscal policies and the rapidly increasing government debt are expected to become economic risk factors that raise the risk of inflation.

According to a survey conducted by the National Association for Business Economics (NABE) from the 22nd of last month to the 5th of this month targeting businesspeople, more than 60% of the panel responded that the risk of inflation is at its highest level in 20 years. At the same time, 90% of the panel said that the increase in government debt is at a worrisome level.

Earlier, through the March Federal Open Market Committee (FOMC) meeting, the Federal Reserve (Fed) repeatedly stated that the recent surge in inflation is not only due to base effects but is also temporary and unlikely to persist in the long term.

The Fed reaffirmed its policy to maintain accommodative monetary policy for an extended period, but concerns about inflation have not subsided.

Among the panelists who participated in the survey, 41% answered that the current fiscal policy is "appropriate." This is an increase from 37% in the survey conducted in August last year. The remaining 34% said the current fiscal policy is "too stimulative," which is double the proportion mentioned in the previous survey. All responses in this survey were submitted before the signing of the $1.9 trillion US economic stimulus bill.

Two-thirds of the panel said structural changes are necessary to resolve the deficit, and more than one-third supported either reducing spending or raising taxes.

This content was produced with the assistance of AI translation services.