Shigeru Ishiba, a former Japanese defense minister and contender in the ruling Liberal Democratic Party’s (LDP) leadership race, emphasized the importance of exiting deflation and achieving sustainable growth in real wages. Ishiba, seeking to become Japan’s next prime minister, pledged to prioritize economic growth and address concerns about his focus on fiscal discipline.
Ishiba’s comments, made at a press conference where he laid out his policy pledges for the LDP leadership race, highlighted the need for a complete exit from deflation. He noted that private consumption has not yet recovered strongly, despite some signs of improvement. Ishiba promised to achieve sustainable growth in real wages, enabling people to spend without worrying about the future.
The LDP’s parliamentary control means its leader becomes the prime minister of Japan, making the leadership race a crucial event in the country’s political landscape. Ishiba’s comments are meant to counter speculation that he is more focused on fiscal discipline than economic growth, a ruling party source close to Ishiba’s thinking said.
Meanwhile, another candidate, former economic security minister Takayuki Kobayashi, reiterated in a separate press conference that economic growth should be prioritized over finance. Kobayashi believes that creating a strong economy would result in increased tax revenue, leading to a sustainable finance and social welfare system. He promised to compile a stimulus package by the end of this year to ease the pain of those affected by inflation, including small- and medium-sized companies, if he were to win the party leadership race.
The LDP leadership race is expected to be followed by a snap parliament election, with calls for increased spending likely to grow as the race unfolds. Japan’s struggle with the industrial world’s heaviest debt, exceeding twice its economy’s size, adds to the urgency of addressing economic growth and fiscal discipline.
