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Here Is The 8-year Balance Sheet Of Abenomics's
Abe, who took office after the 8.9 earthquake and tsunami disaster in 2011, tried to get the world's third largest economy out of the recession by giving huge amounts of money to the market and financial incentives, but the result was not as intended.
Yazar: Tom Roberts
Yayınlanma: 29 Ağustos 2020 16:59
Güncellenme: 6 Kasım 2024 08:38
Here Is The 8-year Balance Sheet Of Abenomics's
Japanese Prime Minister Shinzo Abe announced today that he decided to resign due to his worsening health condition. Abe, who took the prime minister's chair for the first time in 2006, resigned a year later, citing health problems, and in December 2012 he was seated again. Abe, the longest-serving prime minister of Japan, made a name for himself both in his country and in the world with his economic program, as well as this feature. So much so that, by combining the words "economics" with Abe, the concept of "Abenomics" (Abenomy) began to be widely used.
World's Third Largest Economy
Japan, with a population of 126 million, ranks third in the world after the USA and China with an economic size of 5.1 trillion dollars. In a country with an elderly population where the median age reached 48 in 2020, Abe tried to overcome the problem of economic chronic recession with monetary expansion and financial incentives. However, during the 8-year period he was in office, the economic development did not go as planned and followed a fluctuating course. The International Monetary Fund (IMF) predicts that the Japanese economy, which grew 0.3 percent in 2018 and 0.7 percent in 2019, will shrink by 5.8 percent in 2020. The Japanese economy, which tended to shrink before the epidemic, contracted by 27.8 percent on an annual basis in the second quarter of 2020, when the epidemic was effective.Expanded Monetary Expansion And Financial Incentive
During the Abe period, the Bank of Japan (BoJ) made an unprecedented monetary expansion and the ratio of balance sheet size to national income increased from 40 percent to over 130 percent in the 2012-2020 period. This rate is 36 percent in the US Federal Reserve (Fed), which has also signed a record monetary expansion, and around 60 percent in the European Central Bank (ECB). With the monetary expansion, the second policy that came to the fore in the second Abe period was public spending and financial incentives, which were also put in place to overcome the recession. While the ratio of public expenditures to national income was around 40 percent during the Abe period, the ratio of public debt to national income increased from 220 percent to 250 percent in this period. The IMF predicts this rate to approach 270 percent by the end of 2020. Corporate tax has also been lowered in the country, and financial incentives for companies have been increased.The 2 Percent Inflation Target Could Not Be Achieved
During the Abe period, 2 percent inflation was targeted, along with monetary expansion and financial incentives, to overcome the economic recession. A target of 2 percent was set to overcome the problem of deflation (continuous decrease in prices over a period of time) and encourage companies to invest and consumers to spend more. However, this target could not be excluded in 2014. Still, inflation rose above the minus zone. Just before Abe took office, the country had experienced a major 8.9-magnitude earthquake in 2011 and a subsequent tsunami. Before that, it was in a recession that started in the first half of the 1990s. During the Abe period, unemployment fell from 4.5 percent to 2.8 percent in the country. After Abe, the Liberal Democratic Party leadership and who will be the prime minister is still uncertain, but a radical change in the economic policies implemented by Abe is not expected in the short term.İLGİLİ HABERLER
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