Japan Press Weekly

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2015 February 11 - 17 TOP3 [ECONOMY]

Abenomics brings about zero GDP growth

The Abe government’s economic policy, so-called “Abenomics”, is hindering Japan’s economic growth, recent GDP data have shown.

The Cabinet Office on February 16 announced that the growth rate of GDP in 2014 stood at 0.0%.

In detail, while exports increased by 8.2% thanks to the weaker yen stemming from the Abenomics easy money policy, personal consumption expenditures fell by 1.2%, the largest drop in the last 20 years.

The stagnant individual consumption has resulted from declining real wages which were caused by the consumption tax increase to 8% and the Abenomics-induced higher prices. Workers’ real wages have decreased by 1% or around 2.6 trillion yen from the previous year.

The Cabinet Office in its mini-white paper titled “The Japanese Economy 2014-15” estimates that the consumption tax hike slashed household consumption by one trillion yen in 2014.

Japanese Communist Party Secretariat Head Yamashita Yoshiki at a press conference held on the same day commenting on the released GDP figures said that Japan is still suffering an economic downturn created by the consumption tax increase. He stressed that without stimulating consumer spending, which accounts for more than 60% of GDP, it is impossible to achieve economic recovery.

Noting that real wages have been falling for 18 consecutive months, Yamashita said, “The government should work to raise workers’ incomes in order to boost consumer spending.”