Japan aims for over 1% real growth in long‑term economic blueprint

Japan’s government has drafted a long‑term economic and fiscal management blueprint that seeks to raise annual real GDP growth to more than 1%, more than double the average 0.4% achieved over the past five years. The plan also targets nominal growth above 3% and sets a GDP goal of roughly 1,100 trillion yen by fiscal 2040. To finance this, combined public and private investment is projected to exceed 370 trillion yen, with private‑sector capital expenditure aiming for about 230 trillion yen. The blueprint reaffirms a commitment to fiscal sustainability, pledging a gradual reduction of the debt‑to‑GDP ratio and careful management of the primary balance. It calls on the Bank of Japan to align monetary policy with the growth agenda, stressing “appropriate monetary policy management” and keeping borrowing costs low, which could create tension with the central bank after its recent rate hike to 1%. Prime Minister Sanae Takaichi’s administration expects the blueprint to be finalised by mid‑2026, with a focus on strategic sectors such as artificial intelligence and semiconductors.