Japan PM Kishida unveils economic action
plan on 'new capitalism'
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[June 06, 2023] By
Tetsushi Kajimoto
TOKYO (Reuters) - Japanese Prime Minister Fumio Kishida's government on
Tuesday unveiled an action plan on his "new capitalism" programme of
driving growth and wealth distribution through wage hikes, signalling
his commitment to shift the economy into a higher gear.
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![](../images/060623PIX/busine87.jpg)
Japanese Prime Minister Fumio Kishida
arrives for a bilateral meeting with Laos' President Thongloun
Sisoulith, at the prime ministers' office in Tokyo, Japan, Thursday, May
25, 2023. Shuji Kajiyama/Pool via REUTERS/File Photo |
Kishida's economic strategy will focus on investment in human
resources, science and technology, innovation and start-ups, as
well as green and digital transformation, as key driver of
growth.
The action plan and separate mid-year economic policy framework
are expected to be approved by Kishida's cabinet later this
month.
Some lawmakers are speculating that the prime minister may call
a snap election to solidify his position.
While the ruling Liberal Democratic Party (LDP) and its small
ally Komeito are unlikely to lose to opposition parties that are
in disarray, a weak showing at the election could cost Kishida
his job.
"With wages at 30-year high and appetite for investment firming
up, forces are falling into place which will break up a vicious
circle seen in the past years," a summary statement of the
action plan said.
Cautious Japanese firms offered annual wage hikes of more than
3% at this year's wage talks given the need to lure workers
against the backdrop of high inflation and a labour crunch.
Kishida's government is piling pressure on Japanese firms to
foster a higher wage environment and make the job market more
flexible. The government's plan calls for minimum wages to reach
national average at 1,000 yen this year versus 961 yen at
present.
Among other initiatives, it also called for targeted government
spending on green and digital transformation to serve as
catalysts for private-sector investment.
(Reporting by Tetsushi Kajimoto; Editing by Shri Navaratnam)
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