Business

'Abenomics' not aiding Asia: IMF

Kyodo

Prime Minister Shinzo Abe’s raft of economic policies, dubbed “Abenomics,” has delivered “a significant pickup in growth” in Japan, but the impact on other Asian economies has so far been “modest,” the International Monetary Fund has said in a report.

The lending agency said it had suggested in a previous analysis that the policy combination of aggressive monetary easing, traditional fiscal stimulus and growth strategies would create positive spillovers, such as encouraging capital flows into these countries after it was unveiled when Abe began his second stint as prime minister after the December 2012 general election.

But these effects were found to vary across the economies and the “spillover effects within Asia so far have been modest,” the IMF said in its Regional Economic Outlook report on Asia and Pacific on Monday.

The IMF also said Japan’s export recovery has been slower than initially forecast, which could be attributable to factors such as geopolitical tensions with China, corporate expectations that the yen’s sudden depreciation will be temporary, and a decline in the attractiveness of Japanese goods.

The IMF noted a pickup in Japanese foreign direct investment and bank lending to Indonesia, Thailand and Vietnam, but said it was “essentially in line with past trends,” the report said.

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