Practical analysis for investment professionals
18 September 2014

Poll: How Has Abenomics Performed Thus Far?

Posted In: Economics

The second arrow of Shinzo Abe’s “Abenomics” went into effect during the second quarter of 2014. Hoping to escalate government tax revenue, Japan raised the consumption tax rate from 5% to 8%. Business investment, however, declined 5.1%, and private residential spending declined 10.4% during the quarter, resulting in a net decline in GDP of 7.1% versus the prior year.

In fairness, Japanese consumers likely splurged a bit in the first quarter in anticipation of the coming tax increase, so some time is needed to assess the long-term ramifications. Nevertheless, the performance of Japan’s economy right now is troubling and needs to show marked improvement quarter by quarter for Abenomics to be declared a success.

We asked CFA Institute Financial NewsBrief readers to share their views on the performance of Abenomics thus far.

Which of the following statements best reflects your views concerning “Abenomics” in Japan?
Which of the following statements best reflects your views concerning "Abenomics" in Japan?

According to 613 respondents, 58% believe it’s too early to judge its performance, whereas a quarter of respondents believe it’s a failure. Only 7% think Abenomics has succeeded, and 11% said they don’t know.

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

About the Author(s)
Ron Rimkus, CFA

Ron Rimkus, CFA, was Director of Economics & Alternative Assets at CFA Institute, where he wrote about economics, monetary policy, currencies, global macro, behavioral finance, fixed income and alternative investments, such as gold and bitcoin (among other things). Previously, he served as SVP and Director of Large-cap Equity Products for BB&T Asset Management, where he led a team of research analysts, 300 regional portfolio managers, client service specialists, and marketing staff. He also served as a Senior Vice President and Lead Portfolio Manager of large-cap equity products at Mesirow Financial. Rimkus earned a BA degree in economics from Brown University and his MBA from the Anderson School of Management at UCLA. Topical Expertise: Alternative Investments · Economics

3 thoughts on “Poll: How Has Abenomics Performed Thus Far?”

  1. Sudhir says:

    It will be successful as this decline is short term

  2. Abdulaziz Mahasen says:

    It has not performed as much as the hype, just another political game.

  3. Malone Gwadu says:

    He is on the right track. The shocks currently prevalent will soon change into positivity. Only time will tell.

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