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Growth in Japan uneven, tied to population size: poll

Kyodo

Despite Prime Minister Shinzo Abe’s focus on revitalizing regional economies, growth remains uneven across Japan — with the pace of recovery slow the past year in municipalities with smaller populations, a Kyodo News survey showed Wednesday.

Nearly 80 percent of local leaders who responded to the survey expressed discontent with the effects of Abe’s efforts to re-energize the economy.

Many local leaders also called for the government to focus on supporting lower-income households and improving employment conditions, rather than easing monetary conditions in cooperation with the Bank of Japan or reducing corporate tax — policies pursued as the main pillars of the stimulus program dubbed “Abenomics.”

Kyodo News conducted the survey over the month to mid-February, polling 1,788 heads of municipalities, including governors and mayors, of whom 1,776, or 99.3 percent, responded.

Abe has pledged to rejuvenate regional economies, as a series of gubernatorial and other local elections are scheduled in April.

But the survey found roughly 70 percent of the local leaders think the economy, labor conditions and private consumption in their areas remained unchanged over the past year.

Roughly a third reported seeing improvement or deterioration, with the evaluations depending largely on a municipality’s size.

In large cities, better corporate earnings have led to improved labor conditions and rising consumer spending, but smaller cities have yet to see such a virtuous cycle, the survey indicated.

Among municipalities with populations of more than 50,000, 26.3 percent saw improved earnings. The comparable figure for those with less than 5,000 was only 6.8 percent.

A similar gap was observed in the extent of recovery in employment conditions and consumer spending.

Asked to evaluate Abe’s handling of regional economies and his efforts to improve people’s livelihoods, 75.3 percent said he had not fully lived up to their expectations.

In a multiple choice section, 49.7 percent said the government should proceed with deregulation and other growth measures, making that the most frequently cited priority. Raising the wages of low-income earners and reducing income tax were also among the policies the respondents want the government to take now.

Abe has largely depended on the BOJ’s aggressive monetary easing to break with chronic deflation. Analysts expect the central bank to take a further step later this year.

But the survey showed only 2.9 percent hope for additional easing.