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Japan’s economy must shift away from ‘crisis-mode’ to demand-driven growth, government panel says
Japan must shift its policy focus away from crisis-mode stimulus towards achieving private sector-driven economic growth, a government panel said on Tuesday in the wake of the central bank’s decision to end eight years of negative interest rates.
In a proposal to the government’s top economic council, the panel urged policy changes in the face of rising domestic prices and interest rates, as well as wage growth at a 30-year high as companies face job shortages.
«Japan’s economic and fiscal policies must shift away from the crisis-mode approach that worked when prices barely moved, to one that responds to rising prices and strengthening growth,» the panel said in the report, which was submitted to the council’s meeting on Tuesday.
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«We need to achieve a domestic demand-driven growth and a sustainable fiscal structure,» the report said, urging Japan to wean itself off decades of heavy fiscal and monetary support that had underpinned the fragile economy.
The recommendations by the panel and private members lay the groundwork for setting the government’s long-term economic policies and their priorities.
Private-sector members of the government council also called for continued cooperation between the government and the Bank of Japan to ensure wages keep rising next year and beyond.
People have lunch at a seafood restaurant at Tsukiji Outer Market in Tokyo, Japan, Feb. 15, 2024. (Reuters/Issei Kato/File Photo)
«With the BOJ having ended negative rates, monetary policy has entered a new stage,» the private-sector members said in their joint proposal. «We’re seeing an opportunity open up to achieve economic growth driven by private demand.»
The council’s meeting also debated the impact of Japan’s rapidly aging population on long-term economic growth.
Under a baseline scenario that assumes the economy will keep growing around the current pace, Japan will see its per-capita gross domestic product (GDP) rise just 6.2% in 2060, the Cabinet Office’s estimates showed.
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While that will be up from 4.1% in 2020, it will be well below 9.6% for the United States, 8.1% for Germany, 7.6% for Britain and 7.1% for France in 2060, the estimates showed.
Japan has one of the world’s fastest-aging populations that is intensifying labor shortages and leading to a shrinking domestic market. The ratio of those aged 65 or higher is expected to rise to 37.9% in 2060 from 28.6% in 2020, the estimates showed.
Japan’s economy grew 1.0% in 2022, lower than Germany’s 1.8% and 1.9% in the United States for the same year.
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INTERNACIONAL
Israel says Hamas sent a toddler to a military outpost
The Israel Defense Forces (IDF) said on Wednesday that Hamas sent a 4-year-old Palestinian boy to one of its outposts. The IDF says it returned the toddler to Gaza in coordination with international organizations.
«Hamas does not hesitate to use any means to cynically use and exploit civilians and children to advance its terrorism,» the IDF wrote on X.
The child allegedly told IDF soldiers that Hamas sent him, but Israel did not provide information on how the boy knew the terrorist organization sent him there.
The IDF says Hamas sent a 4-year-old boy toward a military outpost. (IDF)
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IDF International Spokesperson Lt. Col. Nadav Shoshani condemned the incident in a post on X, saying that it demonstrated Hamas’ lack of care for civilians.
«Another reminder that Hamas doesn’t care about the people of Gaza and exploits them for terror,» Lt. Col. Shoshani wrote.
Israeli soldiers speak to a Palestinian child who was allegedly sent by Hamas towards their outpost. The child was returned to Gaza.
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During the Oct. 7 massacre, Hamas not only killed Israeli children, but took several as hostages. In November 2023, as part of a deal, Hamas released 30 children from captivity. The last two child hostages in Gaza were Ariel and Kfir Bibas. Their fate remained uncertain for months, until their deaths were confirmed in February 2025 when their bodies were returned to Israel.
«Kfir and Ariel were murdered in cold blood. The terrorists didn’t shoot them—they killed them with their bare hands. Then, they committed horrific acts to cover up their crimes,» IDF Spokesperson Rear Adm. Daniel Hagari said following the return of the Bibas children’s remains.
IDF forces are seen operating in Rafah, a city in the Gaza Strip. (IDF Spokesman’s Office)
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Israeli U.N. Ambassador Danny Danon called on U.N. Secretary-General Antonio Guterres to issue a condemnation of the incident involving the 4-year-old Palestinian child.
«Hamas has a genocidal animosity toward Israelis and equally doesn’t care for the people of Gaza. That’s why the terrorist organization uses babies, children and women as human shields and pawns in conflict. This is contemptible and should be roundly condemned by the United Nations secretary-general,» Ambassador Danon said.
Just last week, the U.N. was slammed over a draft of its report on children in combat zones that appeared to omit stories of Israeli victims.
Throughout the section of the report on Israeli and Palestinian children, there are instances of the U.N. conflicting verified and unverified data. Though the report admits that there is unverified data, it does not give any information on who was responsible for verifying the other figures. This lack of transparency left room to doubt the report’s accuracy.
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