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On August 28, DPJ President Katsuya Okada held his regular press conference.
Okada commented on the recent volatility in stock prices, saying, “The problem is the underlying economic situation.” He made the following four observations regarding the situation of the economy in recent years:
• Under the DPJ administration, real GDP increased by 5.7% from 489 trillion yen to 517 trillion yen. Since the DPJ administration, however, the real GDP has hardly changed under the Abe administration, recording 528 trillion yen for the most recent April-June quarter.
• Consumption increased from 287 trillion yen to 300 trillion yen during the DPJ administration but has been standing at 298 trillion yen during the Abe administration, marking a decrease.
• The real wage index has continued to show negative growth since the Abe administration came to power. While prices have risen, wage growth has not kept pace with price increases. If real wage growth is 100 in 2010, it is currently 92.6.
• The number of regular workers has decreased (from 33.30 million people at the end of the DPJ administration to 33.14 million people currently), whereas the number of irregular workers has increased (from 18.43 million people at end of DPJ administration to 19.53 million people currently).
Okada stated, “Although some suggested that the economy improved as a result of the yen’s depreciation, monetary easing, and stock price increases, recent developments show that for many people, the actual situation is quite different. The Abe administration implemented an audacious monetary easing policy and increased the budget for public works projects – measures that can even be termed prohibited practices. Nevertheless, this is the economic situation we are in. We need to begin anew and address the situation with a sense of urgency.” He went on to say, “We have been disillusioned by Abenomics for too long. This is not at all the actual situation. It was in this context that I recently stated ‘Abenomics has already failed.’”
Asked whether Abenomics failed because of the administration’s overdependence on monetary easing or neglect of the growth strategy, Okada expressed the following view: “I think it is both, but a large part of it is that the growth strategy has not functioned. We will not be seeing the true adverse effects of monetary easing until a little while later. Conversely, the Abe administration has not made full use of monetary easing, despite pressing ahead with such an unreasonable policy. The administration should have rightfully made every effort and concentrated all of its energy on this. (The current situation) is also the result of the administration expending too much energy on the security legislation that Prime Minister Abe so wishes to see enacted.”
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