The escalating spending figure demonstrates Prime Minister Shinzo Abe's determination to stop a sales tax hike, typhoons and weakness in the world economy triggering a recession that would tarnish the legacy of his Abenomics project to restore stable growth. Already Japan's economy is expected to shrink 2.7 per cent this quarter as exports continue to slump and consumption is whiplashed by the tax increase.
"We don't really need this huge level of stimulus now," said Shinichiro Kobayashi, an economist at Mitsubishi UFJ Research & Consulting."Somewhere around 5 trillion yen should be more than enough. This is not about the economy but motivated mainly by political reasons with popularity and a possible election in mind."
"Japan is the easiest place in the developed world to increase spending," said Masamichi Adachi, chief Japan economist at UBS Securities Co."Politicians love it and they've probably gotten tired of all the warnings of a debt crisis that hasn't actually happened over the last decade."
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Source: BusinessTimes - 🏆 15. / 51 Read more »
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