The Japanese government has drafted a list of basic economic and fiscal policies for the year ahead. It says one of its primary goals is to ensure workers continue to enjoy healthy pay raises so Japan can put an end to deflation once and for all.
Officials presented the draft at a government meeting on Tuesday. The document says the Japanese economy has a rare opportunity to leave deflation firmly behind, with workers recently enjoying the biggest wage hikes in 33 years. The government wants to make those pay raises the start of a trend that fuels solid economic growth.
The draft says the government is still pursuing a primary balance surplus in the next fiscal year.
It notes that Japan’s population decline will accelerate from the 2030s, and says the economy needs to continue posting real-term growth of more than 1 percent per year to support public finances and social security.
The government says nominal GDP could reach roughly 1,000 trillion yen around 2040. That would be an increase of almost 70 percent from last year.
The draft also recommends greater investment in digitalization. To support this goal, it calls for more spending on semiconductors and artificial intelligence.
It also pledges support for both capital investment, and research and development.
The draft focuses on decarbonization as well. The government has already said it will pursue expanded use of renewable energies.
To that end it plans to consider support for the development of cutting-edge technologies, such as perovskite solar cells, which are thin, light and bendable.
It may also offer financial backing for floating offshore wind turbines.
The government aims to approve the draft at a Cabinet meeting by the end of this month after receiving feedback from the ruling parties.