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Thursday, May 22, 2014

Have the three arrows of "Abenomics" hit their targets?

April 25th 2014

The eponymous economic agenda championed by the prime minister, Shinzo Abe, known as "Abenomics"—which aims to reflate and put the economy onto a high growth trajectory—continues to have a generally positive impact on Japan's economy, but the government's commitment to forcing through its most controversial measures will be tested in 2014. Failure on this front will have a profound effect on Japan's long-term growth trajectory. The Economist Intelligence Unit expects the economy to remain on a sustainable growth path over the short term, but rates of GDP expansion will remain unimpressive.

The initial, more straightforward stages of Abenomics have been implemented and have broadly achieved what was intended. Mr Abe's platform consists of three strands, or "arrows": flexible fiscal policy, aggressive monetary loosening and deregulation.

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