Firm Growth Expected In Japan Despite Rising Downside Risks

2026-03-05 12:06:00 ET

By Min Joo Kang, Senior Economist, South Korea and Japan

Tax cut pledge will eventually be implemented, though details remain lacking

With the landslide victory of Japan's Liberal Democratic Party ((LDP)) in February, Prime Minister Sanae Takaichi’s “responsible and expansionary fiscal policy” is expected to drive the economy’s growth. She pledged to alleviate living costs and increase public expenditure with the aim of improving the country's strategic industries and quality of life. Among the key campaign proposals was a reduction in the consumption tax on food, without increasing government debt, though no specific details have been provided so far....

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