Last year, the annual GDP growth of Japan was at 3.5% but it is predicted that it will rise to 4.1% by the end of this year. The first annual quarter of this year has already risen by 1% and it is estimated that the GDP will grow by 1% or more in the other three quarters. This could translate into an annual GDP growth of 4.1%; which is a big improvement from the country's previous GDP performances.
Graham Palm, attributes the positive GDP growth to the economic reforms made by Japan's Prime Minister Shinzo Abe. The policy reforms which are popularly known as ‘Abenomics', have stimulated the economy by facilitating the injection of money into the economy. Through participation of the Central Bank of Japan and the country's government, funds have been injected into the economy and industries have thrived by utilizing these fund injections. Consequently, the economy has become robust and deflation rates have reduced greatly.
The Central Bank of Japan has expanded its financial base by purchasing securities and long-term debts. It has also achieved this financial power by merging all its asset purchase programs into one strong unit. Further, the bank has suspended stringent rules that inhibited the purchase of longer-term debts.
This year, the Bank of Japan intends to meet with other investors in order to discuss what better policies the Central Bank should adopt. The third pillar of Shinzo Abe's reforms that is yet to be adopted in the country involves making structural adjustments that will encourage productivity.
This month, Shinzo Abe's government intends to undertake certain policy reforms that it believes could positively transform the performance of the country. These reforms intend to revive redundant nuclear power plants, facilitate immigration, encourage women to join the workforce, and even make the labor market more flexible. In his most recent speech, Shinzo Abe has pledged to eliminate bureaucracies and red tapes that discourage business activities. For example, the Prime Minister intends to give pharmacists the freedom of selling over-the-counter medicines through online platforms. Graham Palm agrees that the ‘Abenomic' reforms could greatly steer the economic performance Japan which is the third largest economy in the world. He strongly supports Abe's proposal of encouraging production through setting up economic zones.
Source: Graham Palm Executive Vice President, with Shizouka Financial
Contact: https://shizuokafinancial.com
