Japan expected to announce second quarter GDP growth

Japan expected to announce second quarter GDP growth

The Japanese Cabinet Office is set to publish GDP data today. Analysts expect GDP to have grown by 2.5% in

Photo: Satoko Kawasaki

Photo: Satoko Kawasaki

The Japanese Cabinet Office is set to publish GDP data today. Analysts expect GDP to have grown by 2.5% in the second quarter of 2017, marking the sixth consecutive quarter of economic expansion for Japan.

That expansion, combined with a 22-year low 2.8% unemployment rate, has led to revived praise for Abenomics, Prime Minister Shinzo Abe’s eponymous economic policy. The IMF hailed the policy’s success in June, after previously urging a change in course following a 2014-15 recession.

While continued growth is a good sign for Japan’s economy, there remains cause for concern. Abenomics’ monetary policy of quantitative easing and negative interest rates aims to raise inflation; at 0.4% it sits well below the Bank of Japan’s 2% target. But the government must be careful about increasing the cost of its debt in the process—currently over 250% of GDP.

Mr Abe’s challenge will be maintaining policies that brought positive developments along with changes to meet that 2% target. A difficult task in its own right, his weakened position caused by recent scandals will make it all the harder.