Prime Minister’s Policy Speech: Desire for ‘Strong Economy’ Clear, But Issue of Realizing It Remains

Editorial

14:52 JST, October 25, 2025

Wage growth has been sluggish, and economic growth also is stagnant.

Prime Minister Sanae Takaichi’s determination to seek to break away from this current situation came across clearly, but the problem is how to implement concrete measures for that purpose.

Takaichi has delivered her first policy speech to the plenary sessions of both houses of the Diet.

The primary focus was on economic policy. One-third of her speech was spent on addressing growth strategies and measures against high prices.

Regarding basic policies, Takaichi said that she will build a “strong economy,” adding, “Under the concept of responsible, aggressive fiscal policy, we will strategically carry out fiscal spending.” She stated that she will realize a “virtuous economic cycle” in which incomes increase, stimulating consumption, and business earnings improve, leading to an increase in tax revenue.

The decline of the Japanese economy is serious. Japan’s nominal gross domestic product has fallen to fourth place globally. Its nominal wages have also failed to grow compared to those in Europe and the United States.

Breaking out of the grave situation, dubbed the “lost 30 years,” is an urgent task that can afford no further delay.

On growth strategies, Takaichi emphasized that public-private investment will be made in cutting-edge technological fields, including semiconductors, biotechnology and artificial intelligence, to strengthen the nation’s economic security and build a disaster-resilient nation.

The idea of investing in advanced technologies to solve the challenges Japan faces is understandable.

Meanwhile, on immediate measures against rising prices, Takaichi mentioned such things as abolishing the provisional gasoline tax rate and expanding grants to local governments.

It is obvious that addressing soaring prices is important, but that alone will not change Japan’s severe fiscal condition.

Takaichi stated that she will reduce the ratio of Japan’s outstanding debt to the GDP by using economic growth to ensure the credibility of government bonds. However, it is worrying if her “aggressive fiscal policy” means leaving ballooning debt unaddressed.

Regarding social security system reform, Takaichi expressed her intention to establish a national council comprising ruling and opposition party lawmakers and experts. It is natural that she has called on opposition parties to participate in the council.

The ruling parties lack a majority of seats in both houses of the Diet, making opposition cooperation essential for implementing the reform. Social security system reform is an issue that the ruling and opposition parties should tackle in an integrated manner.

Takaichi also announced her intention to achieve the goal of raising security-related spending to a level equivalent to 2% of GDP by fiscal 2027 ahead of schedule through this fiscal year’s supplementary budget. She also intends to revise three security documents, including the National Security Strategy, next year, ahead of schedule.

Russia’s aggression against Ukraine has highlighted the critical importance of the ability to continue fighting and possessing new equipment, such as drones. Japan also must strengthen its defense capabilities. It is important to prepare financial resources to that end.

(From The Yomiuri Shimbun, Oct. 25, 2025)