BREAKINGVIEWS-Japan’s growth pitch is all hype and no substance

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Hudson Lockett

HONG KONG, July 22 (Reuters Breakingviews) - Sanae Takaichi wants to double GDP by 2040 by investing $2 trln across 17 sectors. But the prime minister's China-style policy roadmap lacks detail, leaving bond traders to fret about even bigger deficits. Only smart industrial policy, like the US’s old IRA, will move the needle.

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CONTEXT NEWS

The administration of Prime Minister Sanae Takaichi approved its first economic policy roadmap on July 21. It lays out plans to more than double the pace of Japan’s annual economic growth to over 1% with projected public and private investment across 17 strategic areas totalling 370 trillion yen ($2.3 trillion) through the 2040 fiscal year.

The plan removed a pledge made in previous prime ministers’ economic blueprints to restore Japan’s fiscal health, instead vowing to boost growth and achieve “fiscal sustainability”.


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