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Editorial: Japan gov't must act now to protect living standards amid global price hikes

Rising prices of oil and other commodities have become a new point of concern for the global economy.

    In the United States, consumption has declined as commodity prices have risen by over 4% to reach their highest level in 30 years. In China, soaring fuel prices have led to controls on operations at power plants, forcing factories to temporarily shut down in succession. Growth rates for the U.S. and China are down significantly as a result.

    In Japan, too, gas prices are at a seven-year high, and electricity and gas prices are also rising. With the added influence of the weak yen, imported products including beef and wheat are going up in price.

    Behind all this is the coronavirus pandemic. Countries across the world are gradually recommencing their economic activities, which has in turn increased demand for oil and other commodities. But supply hasn't caught up.

    If this situation persists, it could lead to "stagflation," a serious situation in which inflation occurs while the economy remains weak.

    There are concerns that the present circumstances could further affect living, which has already been made difficult under the coronavirus crisis.

    A private-sector estimate has indicated that if oil prices remain high, household expenses in Japan would increase by 30,000 yen (about $263) or more per year per household. It is a particularly difficult situation for single-parent households and nonpermanent workers with unstable incomes, among others in similar circumstances.

    It is feared that restaurants and bars, which have finally been freed of the restrictions on business hours imposed upon them, will again run into difficulties if the costs of ingredients and utilities rise.

    It is imperative that a plan be drawn up to stop the lives of the people enduring further hurt.

    To curb rising oil prices, production needs to be ramped up in the Middle East and other areas where it fell drastically during the pandemic.

    At the G-20 leaders' meeting held recently, the U.S. called for increased production, but the group as a whole did not put forward a concrete plan to do so.

    Oil-producing nations are wary of infections spreading again, depressing demand. But if the global economy cools due to high oil prices, their own countries' economies, too, will suffer from the fallout.

    Japan should not just urge further oil production, but also pursue a medium- to long-term plan that engages with efforts to reduce the rate of dependency upon fossil fuels.

    Global rises in shipping costs are resulting in higher food prices. Port and harbor closures due to infections and a lack of available labor are said to be among the causes. It is imperative that countries accelerate their efforts to vaccinate their populations. Developing countries with slow vaccine distribution are facing a particularly urgent need.

    Economic support for households is also an issue. France has decided to offer cash handouts to low-income workers and others. The Japanese government, too, should apprise itself of the situation and formulate the necessary plans.

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