Economists worried about a Japanese experiment abenomics
Three years ago, Shinzo
Abe launched a grand experiment,
to shake up Japan’s economy after
decades of stagnation. There is growing
the unanimous opinion that the program
premiere on the verge of death.
nicknamed as the
"abenomics"It included a
three so-called Boom: massive
increase in public spending
and significant economic reform.
Program launched rapid start. Bank
Japan doubted that need
to participate in non-traditional
monetary policy, but reluctantly accepted the vision and Abe
launched a large-scale purchase program
bonds. The government “including” flow valve. markets feel
rally, the yen was lower against the
Sindzo Abe has repeatedly talked about the three pillars of his idea
The idea was that
when prices rise, and business will
profit, the company will spend a large share of
to increase salaries to employees,
which, in turn, start over
buy goods and services. If this scheme
work, this "virtuoso cycle"
will provide a stable
the economic growth.
The program, however,
He stumbled badly. Wage growth is weak,
while inflation remains well below target
2%. GDP contracted in annual terms
1.2% in the second quarter, and there
evidence that the economy,
perhaps he went back into recession
the third quarter. "economic
data released since the last meeting
Bank of Japan in mid-September,
provided further evidence that
the economic recovery has stalled".
– says Marcel Tilent of Capital Economics.
Meanwhile, more and more
worried about the astronomical
Japan’s state debt, which
It amounts to almost 250% of the annual GDP.
Recent deterioration in ratings from Standard analysts
Poor’s, which warned that abenomics
"will not fix" deterioration
Japan’s creditworthiness, confirm that all is not well.
So why does not the idea of Abe
It is as follows: the third “Arrow” – economic
reform – flew off target. plans
to allow more immigrants to
slow the rapid aging of the population,
It went nowhere. Plans to make changes
the labor market and the tax system
also stalled. But Abe and his allies
the Bank of Japan still do not give up.
The central bank is likely to continue
the expansion of its programs
encourage – or this week,
or at the end of the month. This is all inevitable,
The Prime Minister, who
may remain in his post for another
three years, also shot "three
new arrows". The measures, however, were
criticized for the lack of
detail and objectives. Abe
could specify how long a boom –
promise to raise nominal GDP
22% – will be carried out.
"This new plan is unlikely
Do accelerate efforts to implement reforms
and may well add to the confusion
a process that many inside and outside
Outside Japan already considered depressing"- says Skott Siman,
an analyst at Eurasia Group.
support optimistic views abenomics.
If a close eye on energy prices,
Inflation figures will look
much better convince them. income for
capita income keeps pace with other
developed countries, and consumption
It is growing.
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