Japan expected to announce second quarter GDP growth
The Japanese Cabinet Office is set to publish GDP data today. Analysts expect GDP to have grown by 2.5% in the second quarter of 2017, marking the sixth consecutive quarter of economic expansion for Japan.
That expansion, combined with a 22-year low 2.8% unemployment rate, has led to revived praise for Abenomics, Prime Minister Shinzo Abe’s eponymous economic policy. The IMF hailed the policy’s success in June, after previously urging a change in course following a 2014-15 recession.
While continued growth is a good sign for Japan’s economy, there remains cause for concern. Abenomics’ monetary policy of quantitative easing and negative interest rates aims to raise inflation; at 0.4% it sits well below the Bank of Japan’s 2% target. But the government must be careful about increasing the cost of its debt in the process—currently over 250% of GDP.
Mr Abe’s challenge will be maintaining policies that brought positive developments along with changes to meet that 2% target. A difficult task in its own right, his weakened position caused by recent scandals will make it all the harder.
