Key facts
- Japan's government aims for real economic growth exceeding 1% annually in a new economic blueprint.
- The target would more than double the average real growth rate of 0.4% seen over the last five years.
- The plan projects combined public and private investment to surpass 370 trillion yen by fiscal 2040.
- Annual private-sector capital expenditure is targeted to reach approximately 230 trillion yen by fiscal 2040.
- The government intends to grow gross domestic product to nearly 1,100 trillion yen.
- The blueprint emphasizes fiscal sustainability and a reduction in the debt-to-GDP ratio.
Japan's government is set to finalize a long-term economic blueprint that targets an ambitious annual real economic growth rate of over 1%, a significant increase from the 0.4% average seen in the past five years. The draft policy framework, reviewed by Reuters, also aims for nominal growth above 3% and seeks to stimulate investment by fostering collaboration between the public and private sectors.
The blueprint outlines a goal to channel resources into strategic industries, projecting combined public and private investment to exceed 370 trillion yen ($2.29 trillion) through fiscal 2040. The government aims to raise annual private-sector capital expenditure to around 230 trillion yen by the same year and grow the nation's gross domestic product to nearly 1,100 trillion yen.
In addition to growth objectives, the framework reiterates a commitment to fiscal sustainability, pledging to reduce the debt-to-GDP ratio. It also calls for the Bank of Japan to align its monetary policy decisions with Prime Minister Sanae Takaichi's growth agenda, signaling a preference for maintaining low borrowing costs and potentially creating policy tensions with the central bank.