When it comes to making an impact Shinzo Abe, Japan’s prime minister elected in December, has certainly hit the ground running.
His policies to kick-start growth in the country – dubbed ‘Abenomics’ – has seen Japan’s GDP improve markedly in the first quarter of 2013 with a figure of 3.5 per cent.
But with the rally in Japanese stocks tailing off at the beginning of June, the question is whether Mr Abe’s ambitious plans are enough to bring investors on board.
Elsewhere in Asia, Indonesia is looking towards an election year in 2014, with the current president, Susilo Bambang Yudhoyono, barred from standing for a further term under the country’s constitution.
Other emerging market governments have also enacted their own measures to combat slowing growth and higher inflation.
A decline in Indian GDP growth, to 5 per cent for 2012-13, triggered moves by the Reserve Bank of India to reverse monetary tightening. A further cut in the repo rate was announced in the Bank’s 2013-2014 Monetary Policy Statement on May 3.
Meanwhile Mexico’s new government is still in the process of taking office, resulting in a slightly weaker first-quarter GDP growth of 1.8 per cent.
Europe, meanwhile, is currently treading water following Italy’s undecided election and the Cypriot banking crisis. However, the continued resolve of the eurozone to support members and restore confidence in Europe means the region is less of a drag on global sentiment.
The next big event is the German federal election on September 22, when Angela Merkel bids to retain her position as chancellor for a third consecutive term.
The consequences of this political battle are likely to extend well beyond Germany’s borders, as the leader of Germany remains one of, if not the most, powerful player at the eurozone table, and any changes could potentially plunge Europe back into crisis.
Nyree Stewart is deputy features editor at Investment Adviser
