Launching the third arrow of Abenomics

Content Type
Policy Brief
Institution
Oxford Economics
Abstract
Shinzo Abe was elected Prime Minister of Japan last December on a programme intended to end two decades of deflation and lost growth in Japan. His regime, dubbed 'Abenomics', consists of three arrows: a monetary stimulus, a fiscal stimulus and structural reform. The first two are well under way. The third has yet to be fired. But following his party's victory in July's Upper House election, Mr Abe has all the backing he will need – or ever get – to forcefully launch the third arrow of Abenomics. This scenario alert examines the potential upsides for the Japanese economy if Abenomics succeeds. Although the economy will not return to the 4%+ growth rates seen in the 1980s, it could secure growth in the 2-3% range. This would be a major improvement on its dismal performance of less than 1% average real growth a year since 1993.
Topic
Economics, International Trade and Finance, Markets, Monetary Policy, Reform
Political Geography
Japan, Syria