If you have been wondering what the word “Abenomics” means… it merely is a merger of the Name of the Japanese Prime Minister Shinzo ABE and EconoMICS. It was coined as a term to refer to the Prime Minister’s attempt to devalue the country’s currency to make its exports cheaper and to also help increase inflation to the targeted 2%. Increase inflation? Yes, just as we fight to bring down inflation in Nigeria to a single digit, some countries fight to have a bit of it. It is like the effect of an energy drink and that of a banned substance.
A little inflation is neded to ensure developed economies continue to grow whilst a lot of it is bad which is why less developed countries fight to keep inflation at single digits. For developed countries, the problem is that they are mostly net exporters and have grown their economy so big that a growth of like 2% is seen as very positive. Unlike undeveloped countries who are mainly net importers, meaning they have to keep spending their currency to buy the dollar so as to finance imports which further devalues their currency. Their economy is also relatively small, so their growth rates are associated with 7-12% per annum GDP.
Based on this, the Japanese will not have to pay higher for goods which they import. Apple products being one of those goods that Japanese don’t produce will then have to be more expensive as Apple will have little choice but to increase the price in Japan to guard against foreign currency loss. It is similar to what is obtainable in Nigeria.
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