Has Abenomics solved Japan's economic problems?

The radical stimulus is paying off quickly. But critics say it's just a sugar rush

A man's reflection is seen in the Nikkei 225 stock index, May 16.
(Image credit: AP Photo/Koji Sasahara)

Japanese Prime Minister Shinzo Abe's bold economic stimulus plan, known as "Abenomics," has triggered a wave of optimism. Last week, the government reported that the country's $5 trillion economy enjoyed a growth spurt in the first quarter, expanding at an annualized rate of 3.5 percent. Sony, the beleaguered electronics powerhouse, returned to profit for the first time in five years, and the Nikkei stock average rose above 15,000 for the first time. Has Abenomics cured Japan's financial ills?

Abenomics has a hefty price tag — $1.02 trillion a year, with the government borrowing nearly 50 percent of every dollar its spends. And the aggressive attempt to boost Japan's economy has yielded results pretty quickly. Martin Fackler notes at The New York Times that Abe has injected Japanese consumers, especially wealthy ones, with a newfound exuberance. At a Tokyo financial district department store recently, $20,000 watches were flying off the shelves, and Fackler says Abenomics gets the credit for shoppers' willingness to spend.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up
To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us