Economic Growth to Spread to Households?

January 4, 2007
By Ken Worsley

Earlier today, Prime Minister Abe declared that “economic recovery will spread to the household sector and be felt by the public.” At the same time, as Kyodo News points out, Abe offered no specific plans for how this might happen.

Should the recovery take root in households, it could finally gain some momentum beyond capital expenditure. However, this observer doubts it will happen on the Abe watch, but would love to hear counterarguments. One of the main issues, from this publication’s point of view, is that Abe seeks an increase in wages not to boost the standard of living, but rather because, “Economic growth is indispensable to bolster the social welfare system.”

Good luck with the balance between wages that won’t rise, a declining birth rate and an increasing pension tax burden on a public about to break, Mr Abe.

Filed Under Consumer Spending