In the months from October to December, the gross domestic product (GDP) decreased by 0.4% compared to July-September under the influence of a sluggish household consumption, according to figures preliminary announced Monday by the government.
These statistics are close to the forecast of analysts polled by the Nikkei business information group that on average expected a decline of 0.3% over the period under review.
Since a VAT increase in April 2014, Japan alternates quarters of modest expansion and contraction, despite the ambitious strategy “ abenomics ” of around three “ arrows “(fiscal stimulus, monetary easing and structural reforms) launched in late 2012 by Prime Minister Shinzo Abe.
In recent months, the country has also been confronted with the market turmoil and the impact of the Chinese slowdown that weighs on Japanese external trade.
If it jumped more than 5% on Monday morning, the Tokyo Stock Exchange fell by over 11% the week before, while the yen climbed sharply against the dollar, a move that could harshly penalize Japanese companies and deal a fatal blow to the “ abenomics “, warn economists.
In these circumstances, the Bank of Japan (BoJ) decided in late January to add a new tool to its range by adopting the negative interest rates, but this has not been the desired effect and some are already predicting a new action at its next meeting in mid-March.
“ The clouds are gathering on the horizon for the Japanese economy. With the rise of the yen, companies will be more cautious in their spending ,” said for the agency Bloomberg Atsushi Takeda, at Itochu in Tokyo. “ The BoJ will probably no choice but to further ease monetary policy if the yen continues to rise .”
– Rebound ephemeral view –
Three years after the launch of its “ abenomics “, deflation remains entrenched in the Japanese mentality: companies remain reluctant to invest and raise wages and household consumption fails to take off. It even declined in the last quarter 2015, draping GDP.
For the full year, Japan posted a growth of 0.4%, saved by the first (+ 1%) and third quarter (+ 0.3%), after a zero growth in 2014 and 1.4% in 2013.
prospects for 2016 ‘Taro Saito, economist at NLI research Institute, does not believe in a recession, “ he is difficult to make forecasts due to an uncertain global environment . ” It does not provide for rapid recovery.
“ Domestic demand is expected to strengthen in the second half of the year ahead of a new tax increase ” in spring 2017, estimates Capital Economics in a note, predicting new rush to the shops to the image of what happened in late 2013-early 2014.
However, this improvement “ should be of short duration, and the activity will probably collapse “just after the passage of the VAT from 8% to 10%. “ The Bank of Japan still has work to do ,” he says.
As for Mr. Abe, according to some analysts could be pushed to abandon this tax increase, despite the strong commitment to international institutions and rating agencies who care regularly exorbitant level the Japanese debt (about 250% of GDP).
Despite the economic woes of Japan, the Conservative Premier, which faces this summer in senatorial elections, can still claim a comfortable approval ratings around 50%, “ while the opposition has been unable to provide a viable program in front , “said Yasunari Ueno, chief economist at Mizuho Securities.