(Original title: Fumio Kishida: The Japanese government will “do everything possible” to achieve real income growth and decisively end deflation)
Zhitong Finance APP learned that Japanese Prime Minister Fumio Kishida said on Tuesday that the Japanese government will “do everything possible” to achieve real income growth to decisively end deflation.
“The biggest mission of my government is to revive the economy,” Fumio Kishida said in a policy speech at the House of Representatives plenary session. “The economy, especially rising wages, is an urgent issue.”
While Kishida did not announce any new policies, he stressed the need to regain public trust in politics. Support for Fumio Kishida’s ruling Liberal Democratic Party has fallen to its lowest level in more than a decade amid a funding scandal.
Achieving sustainable wage growth and stable inflation is a focus of wage negotiations between labor and management this spring, which may pave the way for the Bank of Japan to exit its unconventional monetary stimulus policy.
Last year, Japan’s blue-chip companies proposed a 3.6% wage increase, the largest increase in three decades. Economists now expect the wage range to exceed nearly 3.9% in 2024, reflecting labor shortages and corporate cash reserves of 343 trillion yen ($2.33 trillion).
However, small businesses, which employ 70% of workers, lag behind larger companies in terms of significant pay increases. Analysts are closely watching whether there is a link between the end of deflation and the timing of policy changes by the Bank of Japan.
Although the Japanese economy is no longer in a state of deflation, the risk of another price fall still exists, making it impossible for the authorities to completely end deflation.
Kishida said his government has raised the minimum wage and is seeking to boost wages for public sector workers in health and welfare services, truck drivers and informal workers including part-time and contract workers.
Kishida Fumio said that in addition to raising wages, personal income tax and resident income tax will be temporarily cut by 40,000 yen ($269.96) from June to increase disposable income.
He added: “By achieving increases in wages and disposable income through coordination between the public and private sectors, we will create a positive mindset in society that rising wages are natural.”
Both Kishida Fumio and Finance Minister Suzuki Shunichi stressed the need to address fiscal reform issues.
“Japan’s fiscal situation will become more severe due to several rounds of additional stimulus budgets to deal with the new crown epidemic and rising inflation,” Shunichi Suzuki told parliament.
He mentioned plans to issue about 182 trillion yen of government bonds in the fiscal year ending in March 2025.
Shunichi Suzuki said: “We must ensure market confidence in Japan’s fiscal sustainability through medium- and long-term fiscal reforms. We will continue to promote expenditure and revenue reforms with the goal of achieving a primary budget surplus in fiscal 2025 through normalization of the expenditure structure .”
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2024-01-30 06:40:40
