Finance Minister Shunichi Suzuki said on Friday Japan must come up with a “permanent source of revenue” to fund childcare policies, but voiced caution over the idea of issuing extra debt.
Ranil Salgado, the International Monetary Fund’s Japan mission chief, urged Tokyo to target such financial incentives towards low-income households.
“Everyone acknowledges childcare support is important given Japan’s need to boost the growth rate. But we still believe those measures could be, or any support, should be targeted,” he told an online briefing on Friday.
Japan is among the world’s fastest ageing societies, with the number of newborns falling below 800,000 for the first time, having peaked at 2.09 million in 1973 during the second baby boom.
The declining trend has been blamed for intensifying labour shortages and pushing down Japan’s long-term growth potential.
Some analysts see the latest plan as a sign Kishida is trying to shore up support and gearing up to call a snap election in coming months, to solidify his standing within the ruling party.
“Opposition parties also have no objection to boost childcare spending,” said political analyst Atsuo Ito. “Both sides appear to join in a race to boost reckless spending.”
