Japan emerges from recession
Despite this small victory for Japan, the annualised GDP growth of 2.2% was less than what many experts were predicting.
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Hawke’s Bay
Japan has clawed itself out of the grasp of recession, with an annualised GDP growth rate of 2.2% in the last quarter of 2014.
The quarter-on-quarter GDP numbers show a growth increase of 0.6% in October to December, up from -0.6% the quarter before.
Japan’s recession has been attributed in large part to a consumption tax hike from 5% to 8% in April 2014.
Many analysts say that, as a result, the country’s GDP growth rate plummeted; dropping from 1.6% in the first quarter of 2014 to -1.9% in the second.
But Japan’s consumer confidence has indicated signs of improvement within the economy.
Although still nowhere near levels observed in July 2014, consumer confidence was up 0.3 points on 2014’s fourth quarter number.
Despite this small victory for Japan, the annualised GDP growth of 2.2% was less than what many experts were predicting.
Japan is in the middle of what has become known as “Abenomics” – economic reforms implemented and named after the county’s Prime Minister Shinzo Abe.
This multi-pronged economic reform strategy aims to fight Japan’s economic stagnation by increasing the country’s money supply, as well as boosting government spending and enacting reforms to render the economy more competitive.
In late October last year, Japan’s central bank stunned financial markets by unexpectedly announcing it would swell its monetary base by injecting ¥80 trillion (almost $NZ950 billion) into the financial system each year – up from the current level of ¥60 trillion.
This will mainly be done through the buying of government bonds and is a key element in the Japanese fight against deflation.
Jason Walls
Wed, 04 Mar 2015
Wed, 04 Mar 2015
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Japan emerges from recession
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