"If at first you don’t succeed, try and try again. That’s probably what Japanese Prime Minister Shinzo Abe is thinking right now on the news that Japan's economy grew much less than expected in the second quarter. The expectation was that nominal economic growth would come in at an annual rate of 3.6%. Instead, the economy expanded by just 2.6%.
That’s quite a difference. Perhaps everyone is getting a little too excited by ‘Abenomics’, the revolutionary economic policy that basically involves Japan printing its way to prosperity. Or perhaps this is just how a formerly lumbering economy warms up. A few numbers below expectation and then, wham! an inflationary explosion of economic growth.
One thing is for sure, it certainly won’t deter Japan’s policymakers from continuing on their current course. It’s inflate, or fall into a deflationary trap. Fire or ice.
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