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Abenomics in doubt? Japan GDP figures miss estimates

Laura Dew
Written By:
Laura Dew
Posted:
Updated:
17/02/2014

Japan’s economy grew less than expected at the end of last year, highlighting potential weaknesses in Prime Minister Abe’s economic policies.

Initial forecasts had forecast annualised GDP growth of 2.8% for the three months to December, but the actual figure was only 1%.

The reason for the poor results were weaker private consumption, capital spending and lower export figures.

However, it was the fourth successive period of growth for the country. 

Japan is due to see its consumption tax rise from 5% to 8% in April which will increase consumer prices and could cause further falls in GDP.

Some consumers, however, will be trying to purchase goods ahead of the tax rise to take advantage of the lower prices which could boost GDP figures for the current quarter.

Prime Minister Abe has implemented an aggressive stimulus programme aimed at weakening the value of the Japanese currency and boosting the economy, which had been largely welcomed by investors. 

However, the stimulus programme has not been enough to support asset prices for long – the Nikkei has fallen almost 12% since the start of the year and some investors have been cutting their Japan exposure.


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