http://www.economist.com/blogs/banyan/2014/02/japans-economy?zid=306&ah=1b164dbd43b0cb27ba0d4c3b12a5e227
After Shinzo Abe's new policy has been announced, the Japanese government put the economy of their country into a worse situation. The consumption tax will be increased from 5% to 8%, which is not a favorable decision in the middle of the recovery state. The consumer spending and confidence will decline, negatively affecting the entire condition, which is already in a terrible status, "bruised" by numerous problems that occurred since 1997.
Moreover the real GDP in the 4th quarter of 2013, was only 1%, which was way below 2.8%, which was the percentage the economists had anticipated. The growth rate was only 1.1% when it was observed during the 3rd quarter of 2013, which simply pointed out the end of the positive sign of the Japanese government until early 2013. Most people consider the reason for this was the poor exports, as trade surplus subtracted 1.8% from the boosted domestic demand and government spending - 3 percent. In addition, the shutdown of nuclear power plants made Japan more reliable on other types of energy, thus they had to import energy from foreign countries, which also contributed to the decrease in trade surplus.
Since the whole event is not going too well, Abe's policy will be even more critically judged by how well it has been done, in means of restoration of the Japanese government.
After Shinzo Abe's new policy has been announced, the Japanese government put the economy of their country into a worse situation. The consumption tax will be increased from 5% to 8%, which is not a favorable decision in the middle of the recovery state. The consumer spending and confidence will decline, negatively affecting the entire condition, which is already in a terrible status, "bruised" by numerous problems that occurred since 1997.
Moreover the real GDP in the 4th quarter of 2013, was only 1%, which was way below 2.8%, which was the percentage the economists had anticipated. The growth rate was only 1.1% when it was observed during the 3rd quarter of 2013, which simply pointed out the end of the positive sign of the Japanese government until early 2013. Most people consider the reason for this was the poor exports, as trade surplus subtracted 1.8% from the boosted domestic demand and government spending - 3 percent. In addition, the shutdown of nuclear power plants made Japan more reliable on other types of energy, thus they had to import energy from foreign countries, which also contributed to the decrease in trade surplus.
Since the whole event is not going too well, Abe's policy will be even more critically judged by how well it has been done, in means of restoration of the Japanese government.
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