Get ready for Abenomics 3.0.
You’ve got to give credit to Japanese Prime Minister Shinzo Abe. At least he’s going down fighting.
Abenomics, the economic plan devised by Abe to spur the Japanese economy out of its doldrums, hasn’t worked as well as expected. Of course, world events have conspired against it.
In addition to the Japanese natural inclination to save, China’s slowing economy, the malaise in Europe and falling oil prices have impeded Japan’s recovery. Because of all this, prices in Japan didn’t rise in February, pretty much a stick in the eye to the Bank of Japan, which has been aiming to boost inflation to a rate of 2%. Without energy and food costs, inflation rose just 0.8% year over year, according to a statistics bureau report last Friday.
However, Abe is expected to announce on Tuesday a package of new spending measures to boost the economy, the Nikkei Shimbun reported, without saying where it obtained the information. The source may well be a deliberate government leak.
Japan’s 96.7 trillion yen ($1.15 trillion) budget for fiscal 2016 is expected to become law Tuesday, and Abe is expected to provide details of the new measures at a press conference the same day, the newspaper reported.
The new measures are expected to include shopping vouchers, increased pay for nursery school teachers and public works projects, according to the newspaper.
Consumer and business sentiment has fallen along with the Japanese economy, which contracted in two of the last three quarters. According to a Nikkei survey carried out this month, 26% corporate leaders say Japan’s economy has weakened or is showing signs of weakness, up from 6.9% at the end of 2015.
Other measures the government is working include a stimulus package of about 10 trillion yen and whether to proceed with a planned sales tax increase. The feasibility of these will become clearer after first-quarter gross domestic product growth is released May 18, the newspaper said.