LDP-Komeito ruling coalition makes headway in reviving economy
September 28 , 2017Nearly five years have passed since the coalition government between the Liberal Democratic Party and Komeito was formed in December 2012. In this time, the economy has held steady on a recovery trajectory while employment related markers have remained high. Improved corporate performance, rising stocks and other such financial indicators pointing to expansion have become salient.
Improvements in employment conditions are especially noteworthy. Compared to December 2012, there are now 2.82 million more people with jobs. Women who are employed have increased by 2.14 million. The seasonally adjusted jobs-to-applicants ratio, which had a growth rate of 82% in December 2012 reached 152% by July 2017, rising to such level for the first time since February 1974. With a growth rate of 101% this July, the jobs-to-applicants ratio for full time employment has also made significant gains since 2012 (when it was at 53%).
Nominal GDP has reached an all-time high, rising to 543 trillion yen versus 493 trillion at the time of the ruling coalition’s formation. Due to the yen’s depreciation, export-oriented businesses in particular are showing improved profits. The Nikkei average, which was at 10,230 yen in December 2012, has now crossed the 20,000-yen mark.
National and prefectural revenues from taxes have also increased by a total of some 22 trillion yen in that time. The tourism sector, a major pillar of the country’s economic revitalization strategy, has also made headway with a record number of 24.04 million overseas visitors to Japan in 2016. The consequent rate of consumer spending also rose to 3.7476 trillion yen in 2016, resulting in huge growths in consumption not only in the cities but also in outlying prefectures.
According to the government’s September economic report, “the economy continues to remain on a gradual track to recovery.” The current phase of economic expansion that started in December 2012 has the potential to surpass the “Izanagi Boom,” the second longest post-war expansion that lasted 57 months.