Our new report ‘Japan – No Easy Answers’ finds that the economic revival policies of Shinzo Abe’s government, known as “Abenomics”, are being hailed by some as a credible alternative to the austerity that has been implemented across much of Europe. But they have also pushed government debt to more than US$10trn, making it the highest in the world.
Supporters of Abenomics point out that the economic growth these policies are beginning to trigger will lead to higher tax revenue, keeping debt payments manageable. The government is also planning to double Japan’s relatively low consumption tax rate and a cut in corporate tax rates is being considered, too, with the hope that it would boost investment and economic activity.
Will ‘Abenomics’ live up to the hype or will Japan sink back into another lost decade?