Japan Press Weekly

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2014 November 12 - 18 TOP3 [ECONOMY]

Abenomics causes falling GDP

The Cabinet Office on November 17 reported that Japan’s GDP in the third quarter declined at an annualized rate of 1.6 %, falling far short of the expected recovery.

Prime Minister Abe Shinzo’s economic policies have benefitted only the largest corporations and wealthiest people while unsuccessfully increasing ordinary workers’ wages or improving the employment situation. His economic policies did not even help expand national income or domestic consumption.

Abenomics has turned out to be a complete failure.

The 8% consumption tax rate which was implemented in April has depressed consumer spending which accounts for about 60% of the country’s GDP. Acceleration of the weak yen pushed up consumer prices, hitting people’s lives hard.

Japanese Communist Party Secretariat Head Yamashita Yoshiki on the same day held a press conference in the Diet building and pointed out, “The current ailing economy came as a consequence of the forcible implementation of the increase in the consumption tax rate in addition to rising prices following the depreciation of the yen.”

National Tax Agency data show that the number of “working poor” people whose annual income is less than two million yen reached 11.2 million, up 300,000 from the previous year.

In contrast, large corporations with a capital of more than one billion yen hoarded 285 trillion yen in their internal reserves in fiscal 2013, up 13 trillion yen from a year earlier.

It is necessary to make a major shift in economic policy to ensure job security and an increase in national income, and cancel the plan to increase the consumption tax rate from 8% to 10% next October.