TOKYO — Fumio Kishida was elected prime minister by the Japanese parliament on Monday and plans to tackle reviving the world’s third-largest economy as one of his first tasks.
The 64-year-old former foreign minister was elected on September 29 as head of the ruling Liberal Democratic Party, securing his rise to prime minister. His predecessor, Yoshihide Suga, announced in early September that he would step down. Mr Kishida was due to present his cabinet and hold a press conference later on Monday.
The Japanese economy has slowly recovered from the Covid-19 pandemic, as repeated states of emergency this year have dampened consumer spending on travel, restaurants and entertainment. The country’s gross domestic product in the April-June quarter remained more than 3% below its peak in the third quarter of 2019.
Recently, the signs have improved, even though it was too late to save the unpopular government of Mr Suga. The seven-day rolling average number of Covid-19 infections has fallen by more than 90% from the peak in August, allowing the government to lift the state of emergency last week. Shopping districts and restaurants were crowded over the weekend as voluntary restrictions on businesses were relaxed.
Sentiment among major Japanese manufacturers improved to the highest level in nearly three years in the Bank of Japan’s quarterly survey released on Friday, helped by the global economic recovery.
Mr Kishida said he wanted an economic stimulus valued at several hundred billion dollars to bring the economy back to normal. He also called for distributing government payments to low and middle incomes as a way to trigger a recovery.
“Without distribution, future consumer spending and demand will not be awakened. Without distribution, there is no future growth, ”he said at his first press conference after being elected leader of the ruling party.
“Kishida is keen to support the Japanese middle class by subsidizing spending on housing and education, which should lead to increased consumption,” said Naoya Oshikubo, economist at Sumitomo Mitsui Trust Asset Management.
Stimulus plans are expected to feature prominently in Mr Kishida’s campaign to maintain the Liberal Democrats’ majority in the lower house of parliament, the more powerful of the two chambers of the legislature. Lower house elections are due to take place by the end of November and public broadcaster NHK has said Kishida plans to set October 31 as the election date.
The new political leader of the ruling party is Sanae Takaichi, who led a surprisingly strong leadership campaign against Mr Kishida with the backing of former Prime Minister Shinzo Abe. Ms Takaichi has positioned herself as the heir to Mr Abe’s pro-growth Abenomics policies and said Japan can freely issue debt to fund its recovery from Covid-19 and other priorities as long as the inflation does not exceed 2% of the Bank of Japan. target.
Consumer prices in August, the most recent month for which data is available, fell 0.4% from the same month a year earlier, the government said.
Write to Peter Landers at [email protected]
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