Abenomics comprises three ‘arrows’. The monetary and fiscal arrows have been launched; the pro-growth arrow has not. This column suggests that arguments over the consumption tax burn up precious political capital that would be better spent on growth reforms. A consumption-tax hike won’t stall the expansion, but debates over it threaten to stop reform momentum. The time to release the third arrow is now.
Abenomics is Japanese Prime Minister Abe’s policy package consisting of three ‘arrows’:
- Aggressive monetary easing.
- Flexible fiscal policy.
- Growth strategies.
Together, they aim at lifting Japan’s economy from chronic deflation and stagnation to a normal economy with 2% inflation and strong growth.