Prime Minister Shigeru Ishiba said Monday that Japan should aim to boost its economy to 1,000 trillion yen ($7 trillion) in nominal terms in 2040, instructing his ruling party executives to include it in a pledge for this summer's nationwide election.
The size compares with a nominal gross domestic product of around 600 trillion yen in 2024, which met a target set about a decade ago. Japan, however, had lost its status as the world's third-largest economy to Germany the previous year.
Ishiba said that while giving priority to ensuring that wage growth consistently outpaces inflation, his Liberal Democratic Party will seek to achieve an over 50 percent increase in average income in the same time frame.
The goals were set as the country's major political parties are looking at ways to woo voters with their campaign pledges for the House of Councillors, or upper house, election, with opposition parties calling for reducing the consumption tax to ease the pain of inflation on households.
"I wanted to share with Japanese people what specifically a strong economy will look like," Ishiba told reporters.
"I've instructed party executives to target nominal GDP of 1,000 trillion yen in 2040 and over 50 percent growth in average income at the top of our election promises" for the upper house contest, he added.
Nominal GDP shows the size of an economy in current prices.
Japan's economy expanded in 2024 when the country was reeling from the yen's persistent weakness and the resulting cost-push inflation.
In the run-up to this summer's upper house election, the Constitutional Democratic Party of Japan, the biggest opposition force, is seeking to temporarily remove the consumption tax on food, currently at 8 percent, and offer cash handouts.
Party leader Yoshihiko Noda said Monday that combatting inflation is a major theme for the upper house race, which will replace half of the 248-member chamber.
Ishiba, however, has taken a cautious stance on lowering the consumption tax rate on food as an inflation-relief measure.
The LDP's election chief Seiji Kihara said the party will consider "effective" cash handouts with the use of surplus tax revenue when it formalizes its election platform.
© KYODO
15 Comments
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kurisupisu
Giving out cash will do little to increase GDP.
Ishiba and the LDP have zero idea.
Seigi
Increase productivity first, while not sacrificing quality of life.
Hiro
It's not an unreasonable goal. About 1% real growth and 2% inflation per annum would be needed.
James Dean Jr.
Shoot for ¥1,000 trillion by 2040? Why stop there — let’s toss in flying cars, eternal youth, and a Gundam on every street corner while we’re at it. Amazing how economic ambition always peaks right before an election. At this rate, by 2050 we’ll all be rich on paper — just don’t forget to bring your own cash for eggs.
HopeSpringsEternal
Japan's 'real' inflation adjusted GDP has been shrinking rapidly since 2000. Not adjusting for inflation or loss of $currency 'real' purchasing power, per capita GDP in US$ was +$40K in 2000 (2nd highest globally)
It'll be approx. $32K per capita in 2025 (worst in G-7) assuming Yen/$ exchange rate remains at 145/$
US$ between 2000 & present, lost +80% of its real asset purchasing power of diversified mix of commodities or real assets. Thus, Japan's FAR poorer today, and national debt exploded, approx. 10% of GDP debt service now
As for 2040, any nominal GDP number possible given rising inflation, interest rates and BOJ, but rapidly aging depopulating countries never become 'richer'
Japan to suffer 3 JN deaths this year for every 1 JN birth, by 2035 it'll be approx. 9 to 1 = demographics is $destiny
Japan approx. 3% global 2025 GDP, after being +25% in 1990. 2040? 2% very best case, likely lower, unless large %increase in already record mostly unskilled immigration that's still unable to keep the workforce from decreasing
Have a nice day and let's not forget many areas of the world now attracting serious capital and talent, like US and India will create further GDP headwinds to Japan's future economy, especially due to tech. innovation
fxgai
There will only be about 10 more elections between now and 2040 so sure, why not include a pledge?
I want him to pledge that Japan will adopt a stable money policy personally, e.g. no more aiming for price instability of 2% plus inflation, but I don't like my chances
HopeSpringsEternal
Harsh reality, take almost Anything in Japan's economy, the price has easily doubled on average in last ten years and so 'real' inflation's been conservatively +7% annually
Expect 'real' inflation to only increase moving forward, no matter what the Govt. numbers report
mikeylikesit
If they measure in yen, a 40% nominal increase in 16 years should be easy enough.
What Ishiba is committing to here is not economic growth. Japan’s economy is likely to contract at least slightly over the next two decades. To hit a nominal 1,000 trillion yen GDP, even with slight economic contraction, all that’s needed is 2-3% inflation per year.
Fire up the printing presses, dilute the currency, rob Japan’s people of their savings, and voilà! The nominal GDP is 1,000 trillion yen.
(We, of course, won’t talk about what the actual, inflation-adjusted GDP will be! Or look at how the yen will trade against the dollar or other reserve currencies!)
DanteKH
That means, rampant inflation, like 5% / year, raising taxes to ridiculous amounts, doubling or tripling the prices again, and mission accomplished.
And then, they will wonder why the population living standards are going to be same as a 3rd world country.
Those incompetent dinosaurs have zero knowledge about economics.
HopeSpringsEternal
They know full well, they're just making sure their job security is not threatened and that inflation rages in order to monetize the Govt debt pole.
Plus, Japan has to have structural high inflation in order to keep nominal property prices from contracting, and thus re-starting deflation, as stagflation is far preferable.
HopeSpringsEternal
They know full well, they're just making sure their job security is not threatened and that inflation rages in order to monetize the massive Govt Debt PILE
Plus, Japan has to have structural high inflation in order to keep nominal property prices from contracting, and thus re-starting deflation, as stagflation is far preferable
ThonTaddeo
"Nominal" right there in the headline; practically screaming that they will use inflation to make the GDP number go up while making the people who actually earn all that money poorer. These people are absolutely shameless.
So, cumulative inflation of 49.9% over the next 15 years? And that 50% increase in income won't be evenly distributed. It'll be the upper echelons of society getting it all while those without the leverage to demand higher wages (the under-educated, the disabled; the "ice age generation" who will be approaching retirement age) keep on getting hammered by inflation and seeing their quality of life plummet.
All by design.
Asiaman7
@ThonTaddeo
If ThonThaddeo writes a book, I’m buying it!
Wisdom!
Tim Sullivan
My message to all the young people out there, get out now while you still can!
elephant200
He and his LDP will no one remember this aiming after the summer nationwide elections, nobody will talks anymore !