If Japan’s ambitious plan to pull its beleaguered economy out of a deflationary rut falls flat this year, it won’t be the only country that feels the pain, economists at asset management firm Schroders have said.
Although the first two arrows of ‘Abenomics’ have had some success in creating inflation and economic growth, naysayers have cast doubt over whether Prime Minister Shinzo Abe can pull off the third arrow of his plan – structural reform. Thus, they are fearful that the upcoming consumption tax hike in April could damage Japan’s economic recovery beyond repair.
According to Craig Botham, emerging markets economist at asset management firm Schroders, if Abenomics does fail, emerging markets will be left vulnerable.
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