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Newly appointed Japanese economy minister optimistic about progress towards defeating deflation


Sep 14, 2023

Japan’s new economy minister, Yoshitaka Shindo, expressed optimism about the economy’s recovery from deflation during his inaugural press conference. He identified positive signs such as the supply-demand gap, but emphasized the need for these indicators to strengthen further before declaring victory over deflation. Shindo echoed Prime Minister Fumio Kishida’s determination to achieve growth led by private demand and break out of deflation.

When asked about the connection between overcoming deflation and phasing out monetary stimulus, Shindo refrained from commenting on monetary policy. As the new economy minister, he will play a central role in coordinating new economic measures. Shindo expressed his desire to pursue bold economic policies, which could potentially increase the public debt burden.

Shindo also stressed the importance of achieving both economic growth and fiscal reform. He highlighted the need to put the economy on a growth path to achieve the primary fiscal balance target. Prime Minister Kishida plans to finalize new economic measures to alleviate the impact of rising fuel and living costs, as well as prepare a supplementary budget for fiscal restructuring. However, the goal of achieving a balanced primary budget by March 2026 may become more challenging.

Although little is known about Shindo’s specific views on monetary and fiscal policy, he is considered to be close to former Prime Minister Shinzo Abe. Abe implemented bold monetary easing, flexible fiscal spending, and growth strategies, collectively known as “Abenomics,” to revive Japan’s stagnant economy.

Overall, Shindo’s appointment as economy minister and his commitment to bold economic policies indicate Japan’s intention to tackle deflation and achieve sustainable growth.

By Editor

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