Growth must replace public stimulus, Shinzo Abe says
PM promises revival of Japanese economy amid growing concerns over reliance on borrowing
Japanese Prime Minister Shinzo Abe pledged yesterday he would not keep stimulus spending "forever" in a policy speech ahead of a budget that will raise more from taxes than borrowing.
For the past four years, the majority of money spent by the government has been raised by selling bonds.
Abe announced the shift in a policy speech on the same day that an opinion poll showed a boost in his popularity since he came to power last month.
"We can't continue fiscal spending forever," he said at the opening of parliament. "We will draw up and implement a growth strategy that will see private investment and consumption grow sustainably.
"The greatest and most urgent challenge for our country is revival of the economy. We can't exit from deflation and from a high yen by keeping the past measures. Therefore I present a bold policy package."
The policy speech comes after his government announced a US$226.5 billion stimulus package earlier this month, raising concerns over the level of Japan's already-towering public debt.
In his first policy speech since taking office in December, Abe repeated his "three arrows" of economy policy: aggressive monetary easing, flexible fiscal spending and a growth strategy to spur private investment.