Japan PM Kishida instructs compilation of 6-year economic, fiscal plan
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Japanese Prime Minister Fumio Kishida speaks during a joint press conference in Seoul, South Korea, May 27, 2024. REUTERS/Kim Hong-Ji/Pool/File Photo
TOKYO (Reuters) - Japanese Prime Minister Fumio Kishida instructed his government to compile a long-term economic and fiscal plan on Tuesday, drawing a line under nearly two decades of falling prices and economic stagnation.
"Japan is now facing great opportunities to move out of the cost cut-focused economy and enter a new stage," Kishida said at the Council on Economic and Fiscal Policy (CEFP).
The new plan, spanning six years from April 2025, will promote productivity and investment to stably achieve real annual growth of more than 1% while rebuilding fiscal health, Kishida said, without elaborating on any financial details.
Reuters first reported about the plan last week, citing two sources with direct knowledge of the matter.
The plan will be included in a key mid-year policy outline due later this month.
Kishida made the call after private-sector members of the key government panel recommended such a plan.
"In the new medium-term framework, we should move Japan to a new stage, thereby expanding the economy and achieving both economic revitalization and fiscal consolidation," they said in a statement.
In a landmark move in March, the Bank of Japan 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.
As higher rates could increase interest payment burdens on government debts, the members also called on the government to stick to its goal of achieving a primary budget surplus by the fiscal year-end in March 2026 and set a new target beyond to restore fiscal health.
(Reporting by Makiko Yamazaki and Kentaro Sugiyama; Editing by Rashmi Aich)
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