Tuesday, August 26, 2014

Current situation in Asian economy

Recently, some Asian countries are focused on as their aggressive policy on the economy.

Japan is no exception. Abenomics was broadly reported as a solution against long lasting depression, which was annoying Japan, as I wrote before.

My past entry: Abenomics and consumption tax

The outcome of Abenomics is still fluctuating. Turning to India, however, an amazing progress is occurring. The Prime Minister, Narendra Modi, is honored as if he is reincarnated Ronald Reagan.

Forbes: Republicans Think India's Narendra Modi Is New Reagan

Since ruling Bhāratīya Janatā Party has won in the last general election, Modi administration is expected to lead India to stable economic growth. India has a large amount of young citizens. Domestic demand will be raised for some decades. Therefore, it is probable that India will take an initiative on Asian economy in the near future.

On the other hand, South Korea is challenging to improve its financial problem.

CNBC: Choinomics - Breakthrough for South Korea?

Counter to India, Korea is annoyed by the shortage of domestic demand. Korean companies had to fight in the global field to survive the era. Understanding the situation, the government made great effort to grow some companies such as Samsung up to world famous ones. Its attempt resulted in success for the first move. However, there are several burdens to interfere Korea now.

Park Geun-hye, Korean President and  Choi Kyung-hwan, finance minister are aiming to reactivate Korean market. A large amount of money was thrown into the market, as Choinomics. Its effect may be strong, though its sustainability is doubtful. Additionally, Park has some political risks. The relationship with North Korea, emotional conflict with Japan, and domestic enemies such as opposing parties are difficult to treat.

By the way, the economic growth rate of Japan was decreased the last month, perhaps due to the raised consumption tax. Japan will also face to tough situation.

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