Japan’s ruling Liberal Democratic Party, the LDP, may increase its majority in Sunday’s national elections. A Kyodo News survey said the LDP will win at least 300 of the 475 seats, five more than in the last lower house election two years ago. Prime Minister Shinzo Abe said he wants to gauge public support for his economic revival plan known as Abenomics. CCTV America’s Mike Firn reported this story from Tokyo.
‘Abenomics’ struggle to boost Japan’s economyJapan's ruling Liberal Democratic Party, the LDP, may increase its majority in Sunday's national elections. A Kyodo News survey said the LDP will win at least 300 of the 475 seats, five more than in the last lower house election two years ago. Prime Minister Shinzo Abe said he wants to gauge public support for his economic revival plan known as Abenomics. CCTV America's Mike Firn reported this story from Tokyo.
If Sunday’s election in Japan is a test of Abenomics and efforts by Abe to expand the country’s economy, the signals are mixed.
Government spending hasn’t delivered growth. The economy is a little bigger than it was at the end of 2012.
Keeping interest rates low and huge purchases of government bonds and Japanese financial assets by the nation’s central bank have helped.
“Essentially, that put Japan in the position of putting its foot on the monetary accelerator flat to the floor while also putting the other foot on the fiscal brakes, and we saw what happened this year, the economy being pushed into a technical recession,” S&P Chief Global Economist Paul Sheard said.
Abe has resisted Finance Ministry pressure to raise the sales tax again next year. But the 18 month delay has led ratings agencies to question Japan’s commitment to cut public debt, which the International Monetary Fund said is nearing two and a half times the size of the economy.
“Japan is in the position the UK was in during the 1970’s, and it needs a Thatcherization, a privatization of the public corporations and taking them out of the public balance sheet and reducing public debt substantially,” Ji Asia Managing Partner Stephen Church said.
Economists said Abe needs to follow through on promises to reform key sectors like agriculture and pharmaceuticals, so the government can drop import duties and sign global free trade agreements.
Michael Pento of Pento Portfolio Strategies discusses Japan economy
CCTV America interviewed Michael Pento, president of Pento Portfolio Strategies and author of the book “The Coming Bond Market Collapse”, about Japan economy, and how does Abe pull Japan out of deflation.