Three Strikes for Japan and Abenomics
Consumption Tax Hike, Typhoon Hagibis and Covid-19 hurt Japan’s economy for sure, but one of it was an unforced mistake.
The huge tension on the Diamond Princess cruise was finally lifted — the ship docked in Yokohama, south of Tokyo, with over 3,700 people under quarantine for coronavirus since early February is no longer in a lock-down. However, it is hard for Japanese officials to feel relief.
Troubled Japan
According to figures released on February 17, Japan’s GDP fell by 6.9% in Q4 2019 at an annual pace. This economic contraction not only put a stop to Japan’s 4 continuous quarters expansion (i.e. Q4 2018 — Q3 2019), but it is also the largest economic shrinkage since 2014.
Many blame Japan’s prime minister, Abe Shinzō, for the troubled economic outlook; the Abe government stuck with the schedule and implemented a fiscal policy: consumption tax was raised from 8% to 10% on Oct 1, 2019. Others blame the strongest typhoon that hit Japan in decades, Typhoon Hagibis, that killed at least 98 people and made landfall in Shizuoka and Greater Tokyo Area. With the outbreak of a new coronavirus, covid-19, it is further threatening the economic recovery of Japan.
