If there’s still any doubt in the minds of the public that “Abenomics” is working (and there are a lot of doubters), an economics and fiscal policy draft prepared by the government is set to announce that the nation is almost on its way out of its decades-long deflation. The draft analyzes and highlights the effects, successful and otherwise, and challenges brought upon by the first 500 days of Japanese Prime Minister Shinzo Abe’s second term since he took up the post as the country’s premier in December 2012.
One highlight in the draft policy is the improvement in the gross domestic product (GDP) of Japan for the past six consecutive quarters. With this in mind, the draft went on to say that the economy could “no longer be termed in a state of deflation,” and on its way to completely overcome it. It also conveyed its hope that the Bank of Japan will be able to reach its target inflation rate of 2 percent by next year should things continue to improve. Another thing mentioned in the draft is the decline in unemployment rate overall the nation by 3.5 percent. Japan has been battling with unemployment for years with some companies laying off many employees before to keep themselves afloat. In recent months, some of these firms have gone back to hiring former employees and even implemented an increase in their salaries.
On the other hand, the downside of the “Abenomics” policies was seen in the need to come up with more sustainable employment and better wages. With the population of Japan continuing to age, the government is struggling to come up with programs to ensure that many can still continue working past the retirement age, should they still be able to do so. It also mentioned the challenge of gender equality in the workplace, which is something Abe has been trying to address by giving incentives to companies who would hire more women and put them in management positions. A decrease in consumer spending following a tax increase last April was also a major factor for economic problems in the country. The paper went on to recommend policies that would ensure that all the measures placed by “Abenomics” would continue to be effective. Some of the examples mentioned were a review of the current social security policies and further infrastructure developments.