Japan on the growth path, asserts Abe

Japan's Prime Minister Shinzo Abe gives a speech during the Asia-Pacific Economic Cooperation (APEC) Summit in Nusa Dua. PHOTO/AFP

In Summary
Leader said that economic outlook was good due to deep reforms and massive spending

 By AFP
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NUSA DUA, Monday

Japan has emerged from the “crossroads” of economic stagnation with deep reforms and a massive spending package expected to put it back on the growth track, Prime Minister Shinzo Abe said on Monday.

Speaking to Asia’s top corporate executives at a summit, Mr Abe said that through his three-prong strategy to revive the Japanese economy, he has succeeded in “breaking through the mentality of economic stagnation that had been permeating Japan”.

The Japanese leader singled out his move to raise the consumption tax rate from five per cent to eight per cent with effect from April 1 next year.

The increase is seen as crucial to shrinking the country’s huge national debt and marks a major political gamble for Mr Abe, with previous tax rises having led to the downfall of his predecessors.

Mr Abe has also unveiled a 5 trillion yen ($50 billion) spending package aimed at softening the blow from the tax increases.

“I now feel very intensely that we have emerged from this crossroads onto a path that runs straight out before us,” he said in a speech to the CEO Summit.

RAPIDLY AGEING

The meeting of big business is running parallel with the annual summit of Pacific Rim leaders in Bali, Indonesian.

“It is my belief that it is possible to revive the economy and restore the soundness of public finances in a compatible way,” he said. “There is no other path forward.”

Japan is wrestling with the developed world’s heaviest debt burden, inflated by years of ineffective efforts to stimulate the economy through spending and soaring welfare costs in a rapidly-ageing society. (AFP)