Abenomics gets boost from cheap oil, weakening yen

TOKYO—Japan’s economy is rebounding from recession, boosted by cheap oil and a weakening yen, and giving fresh hopes for Prime Minister Shinzo Abe ’s tarnished Abenomics revival program.

A number of economists say, however, that new data suggest only a temporary respite from long-term decline rather than the lasting end to deflation the government seeks to foster.

The good news is that companies are starting to ramp up production as the damaging effects of an April sales-tax increase finally wear off, and consumer spending is showing hints of recovery. Gross domestic product likely expanded by an annualized rate of at least 3% in last year’s final three months, following two straight quarters of contraction, according to a recent survey of 41 forecasters by the Japan Center for Economic Research.

For the next two years, the economists surveyed see annual growth between 1.5% and 2%. That is a solid turnaround from the likely 0.6% decline for the fiscal year ending in March and especially robust for a country with a shrinking working-age population, whose long-term average growth has been much lower.

“Recession Is Behind Us” was the title of a report issued Friday by Credit Suisse economist Hiromichi Shirakawa.