Japan’s Bet on Reforms: Growth First – Fiscal Sustainability to Follow
Given the underwhelming results of the large-scale fiscal and monetary stimulus implemented by the administration of Japanese Prime Minister Shinzo Abe, the country is now focusing on structural reforms. The government's new economic and fiscal plan – released in late June 2015 – is clear in its message: to reduce Japan’s gigantic debt, now estimated at over 246 % of GDP, and achieve fiscal sustainability, the country needs robust economic growth. The government is betting that structural reforms will trigger a ‘productivity revolution’ and boost income, investment, consumption and profits. Fiscal sustainability will then follow, as a revitalised economy will broaden the tax base and bring in higher revenues. Despite Abe’s good intentions, however, his economic policy agenda has been criticised on several fronts. The international community is calling for greater fiscal discipline, while the business community is dissatisfied with proposed measures to simplify doing business in Japan. The plan has also failed to convince many of Abe’s genuine commitment to advance economic reforms at a time when the Prime Minister seems more interested in upgrading Japan’s defence capabilities. If Japan is serious about restoring its glorious economic past, far-reaching economic reforms will need to move at a faster pace.
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- Asia and Oceania
- economic analysis
- economic conditions
- economic geography
- economic growth
- economic policy
- economic reform
- economic situation
- economic statistics
- economic structure
- ECONOMICS
- EMPLOYMENT AND WORKING CONDITIONS
- executive power and public service
- FINANCE
- fiscal policy
- GEOGRAPHY
- government policy
- Japan
- labour market
- labour market
- monetary economics
- monetary policy
- POLITICS
- public debt
- public finance and budget policy
- structural adjustment
- taxation