HANOI: Vietnam benefited from new Japanese investment, Although Japan has regained growth momentum, the economic policies of Prime Minister Abe continue to be challenged.
Bionomics includes three main pillars: loosening monetary policy, boosting public spending, and deep and wide economic growth policy. According to the Japanese government, in the second quarter of 2014, Japan’s GDP fell by 7.3%. The real GDP decreased 1.6% in Q3. According to experts, an economy that decreases two consecutive quarters is falling into recession.
An opposite effect of Abenomics is the implications of a cheap yen. According to the Tokyo Shoko Research Research’s research conducted late last year, 48.4% of Japanese companies said they were negatively affected by the consequences of the rapid devaluation of the yen. 22.7% said that they were under both positive and negative impacts. The particularly negative effect cited is the increase in the price of imported goods.
Among the businesses affected by the depreciation of the yen, 80.8% said they were not able to adjust the import price through product prices. When asked about measures to be taken to deal with the depreciation of the yen, 73.2% were pessimistic, saying that they did not have feasible measures.
Another consequence is the trade deficit. It is worth noting that the trade deficit of Japan has lasted for 29 consecutive months, while Japan is a country whose economy relies on exports.
The economist also pointed out that Abe’s policies have not succeeded in increasing income for the people. The average income of households fell in September 2014, marking a decline in 14 consecutive months.
The bad news about the Japanese economy has caused criticism of Abenomics, especially from Jeff Kingston, professor of politics at Temple University in Tokyo, who said bluntly: “Abenomics is a failure”.
2015 outlook
In the bleak context of 2014, comments on the outlook of the economy in 2015 of the world’s third largest economy were not optimistic.
According to a 2015 survey by the leading business statistic agency of Japan – Teikoku Data Bank – conducted earlier this year, the number of companies optimistic about the prospect for the new year declined, while concerns over the cheap yen rose abnormally.
Specifically, only 13.4% of companies in the survey said that the economy will recover in 2015, nearly half compared to the survey in 2013.
