Because Abenomics will continue even after Abe

13 September 20204 years ago babelfish

What will happen to Japan's economic policy after the resignation of Prime Minister Abe? The comment by Christoph Siepmann, Senior Economist of Generali Investments

Japanese Prime Minister Abe has resigned on health grounds, which raises questions about his successor and the fate of the ultra-expansive monetary and fiscal policy known as “Abenomics”. Abe's choice also generated speculation about a possible early election. Considering the Liberal Democratic Party (LDP) majority in parliament, the next party president is set to become the next Prime Minister of Japan. The LDP will likely elect its new leader on September 14, and the party's Diet members will play a dominant role.

Currently, there are three contenders: the first is head of the cabinet office Suga, 71, who has been Abe's "right hand man" for the past eight years and is believed to offer continuity. A potential "rebel" is former LDP general secretary Ishiba, who has the highest support in public opinion polls, but a weaker position among members of the LDP Diet. Finally, Foreign Minister Kishida, 63, came forward. It's considered Abe's personal preference, but he's not well known to the general public.

For the time being, the greatest odds fall on candidate Suga and, overall, the suitors offering continuity appear to be in a better position. This implies that we do not expect a major short-term change in Abenomics. There is also a lot of speculation about early elections. The main argument in favor is that a new Prime Minister, appointed precisely following elections, generally benefits from greater public support. On the other hand, a new Prime Minister may first want to quickly get Japan out of the recession and the Covid-19 crisis, before calling new elections. While there is no clear vision, the markets seem to predict early elections.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/perche-labenomics-continuera-anche-dopo-abe/ on Sun, 13 Sep 2020 05:52:50 +0000.