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B&E This Month
Japan: Abenomics not yet working!

Issue Date - 01/03/2014

Most onlookers, policymakers and economists – had hoped that the Japanese GDP would rise by about 3% y-o-y in the fourth quarter of 2013. That didn’t happen. Despite unorthodox policies introduced by Japanese PM Shinzo Abe, the world’s now third-largest economy (that has continued to remain at the wrong end of discussions since a property-and-stock bubble collapsed in the early 1990s), is yet to show signs of a revival. In recent months, policymakers have tried to trigger growth by countering deflation in the economy with a massive infusion of cash from the central bank and spending by the centre and encouraging companies and consumers to spend more freely. But the February 17 announcement that the national  GDP had grown a measly 1% on a y-o-y basis and by 0.3% on a q-o-q basis in the fourth quarter of 2013, doesn’t yet prove that Abenomics is working wonders. A feeble growth in net exports during the past quarter and a likely increase in sales tax that could hit consumer spending raises doubt over the likely chance of a quick recovery for Japan.


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