japan prime minister shinzo abe

Japanese Prime Minister Shinzo Abe gestures during a press conference in Buenos Aires. Pic: Reuters/Agustin Marcarian

Analysts: Japan must push reforms to generate economic growth from within

PRIVATE-sector analysts say that in order for Japan to be able to generate economic growth independently, the government must implement structural reforms before the economy tanks in the second half of 2017.

According to the Nikkei Asian Review, private economists are predicting an average growth of just about one percent in fiscal 2017, 0.5 percent less than the Japanese government’s own forecast.

The government expects planned economic stimulus measures to have an impact amounting to over US$238 billion (28 trillion yen), but analysts are much more skeptical and believe the boost will wear off later in the year.

SEE ALSO: New startup wave challenges Japan’s aversion to risk

Japan’s economy has been locked in a battle with deflation for the past 20 years, despite Prime Minister Shinzo Abe’s pledge to get the country out of its economic misfortunes.

The economy shrank in the last quarter of 2015 at an annual rate of 1.4 percent, reported the World Economic Forum, which does not bode well for a country whose economy has been in stagnation since the 1990s.

Bigger international trends are also expected to affect the Japanese economy, with market watchers warning of possible headwinds from the direction of the U.S., Europe and Asia.