Japan | Kishida chases two elusive ends: growth and redistribution
The pandemic and a fragile political base will provide little room for new PM Fumio Kishida to make drastic changes to economic policy. Our view is that with the backing of the central bank, Kishida’s government will come up with a huge supplementary budget to support the ongoing recovery.
What you will learn:
- The unease in financial markets – that the new prime minister will reverse Abenomics’ pro-growth and “neoliberalism” policies along with its pro-market reforms – is overblown in our opinion.
- Kishida has called for a “new type of Japanese capitalism” and argues income redistribution is needed to rebuild the middle class and promote growth. Yet, his advocacy of fiscal discipline appears to be at odds with greater dynamism.
- We believe Kishida’s equivocal position aimed at both growth and redistribution will prevent him from taking meaningful measures to promote expansion.
Tags:
Related Services
Post
Finland’s growth forecast cut amid weak confidence and soaring inflation
We have lowered our 2022 GDP growth forecast for Finland to 1.5% from 1.7% last month, as weakening confidence further dampens the outlook. We expect inflation to peak higher with a greater passthrough to core prices, squeezing real incomes and denting consumption. Russia has accounted for almost 10% of Finland's goods trade, among the highest in Europe.
Find Out More
Post
Why we see eurozone inflation slowing sharply next year
We have revised our 2022 eurozone inflation forecasts sharply higher, to 6.0%, since the start of the Ukraine war, as energy and food prices began to soar and new supply bottlenecks emerged. That said, we still see inflation decelerating sharply to 1.3% in 2023, putting us below consensus. While we recognise significant risks to our views, inflation should slow to below 2% in H2 2023.
Find Out More