Japan PM Kishida to announce compilation of six-year economic, fiscal plan

By Thomson Reuters May 31, 2024 | 5:41 AM

By Takaya Yamaguchi

TOKYO (Reuters) – Japanese Prime Minister Fumio Kishida will announce a new economic and fiscal plan for the next six years on Tuesday aimed at boosting economic growth, two sources with direct knowledge of the matter told Reuters.

Kishida will instruct the government to discuss details of the new plan when he makes the announcement, said the sources, who declined to be named as the matter is private.

The Cabinet Office declined to comment.

The potential plan, which will span six years from April 2025, will aim to boost growth through labour market reform, domestic investment and higher productivity, according to the sources.

The measures are expected to ensure that wage growth will be higher than inflation in the next fiscal year and beyond to mark a clear exit from deflation.

That would draw a clear line under nearly two decades of falling prices and economic stagnation that followed the collapse of its “bubble era” boom that stretched from 1986 to 1991.

In a landmark move in March, the BOJ ended eight years of negative interest rates and other remnants of its radical stimulus, as it judged that sustained achievement of its 2% inflation target was in sight.

The new plan is likely to include fiscal policy after Japan meets its goal of achieving a primary budget surplus by the fiscal year-end in March 2026, the sources said.

Reuters reported that the government is expected to stick to its goal in a key mid-year policy outline due out later next month.

(Reporting by Takaya Yamaguchi; Writing by Makiko Yamazaki; Editing by Sharon Singleton)