Japan | Kishida chases two elusive ends: growth and redistribution
The pandemic and a fragile political base will provide little room for new PM Fumio Kishida to make drastic changes to economic policy. Our view is that with the backing of the central bank, Kishida’s government will come up with a huge supplementary budget to support the ongoing recovery.
What you will learn:
- The unease in financial markets – that the new prime minister will reverse Abenomics’ pro-growth and “neoliberalism” policies along with its pro-market reforms – is overblown in our opinion.
- Kishida has called for a “new type of Japanese capitalism” and argues income redistribution is needed to rebuild the middle class and promote growth. Yet, his advocacy of fiscal discipline appears to be at odds with greater dynamism.
- We believe Kishida’s equivocal position aimed at both growth and redistribution will prevent him from taking meaningful measures to promote expansion.
Tags:
Related Services

Post
BoK’s monetary policy to tighten even as hiking cycle ends
Even without rate hikes, central banks' monetary policies can effectively tighten if the nominal neutral rate falls below the policy rate. We expect this will be the case for the Bank of Korea this year, as the gap between the policy rate and the nominal neutral rate widens.
Find Out More
Post
Why China isn’t about to save the world economy
The earlier and faster than expected ending of zero-Covid restrictions in China bodes well for the global economy and adds to the recent run of positive news.
Find Out More