How has PM Shinzō Abe improved the Japanese economy?

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Japan came out of recession in the fourth quarter of 2014, but the world’s third largest economy grew at a slower pace than previously expected. The economy expanded by 2.2% in the three months to December in a preliminary reading, compared to a 3.7% increase as forecasted.
Japan came out of recession in the fourth quarter of 2014, but the world’s third largest economy grew at a slower pace than previously expected. The economy expanded by 2.2% in the three months to December in a preliminary reading, compared to a 3.7% increase as forecasted. Japan’s growth in the fourth quarter comes after the economy shrank for the two previous quarters. The country has been recovering from an increase in sales tax, which significantly discouraged spending.

This ‘issue of confidence’ shows that firms do not believe that the domestic economy is improving, which is a reflection of whether Prime Minister Shinzō Abe’s economic policies termed ‘Abenomics’ are succeeding.

After almost two years of ‘Abenomics’ has Japan’s economy improved? Large amounts of money have been put into circulation in the Japanese economy which has had two main impacts. It has increased real estate and stock prices, whilst reducing the value of the yen. The first has made wealthy investors richer; and the second has made big Japanese exporters richer. Japan’s lacklustre growth comes despite a series of stimulus measures by the government markets.

Stagnant wages and rising prices through most of last year mean most Japanese have seen less disposable income however one positive aspect is that unemployment has fallen to 3.5%.