Finance Minister Shunichi Suzuki said on Friday that Japan needs to establish a “permanent source of revenue” to finance childcare policies, but warned against issuing additional debt.
International Monetary Fund (IMF) Japan representative Ranil Salgado urged the Japanese government to provide financial incentives for low-income families.
“Everyone acknowledges that childcare support is important given that Japan needs to boost its growth rate,” he said at an online briefing on Friday.
Japan is one of the fastest-aging societies in the world, with the number of newborns falling below 800,000 for the first time after peaking at 2.09 million in 1973, during the second baby boom.
The declining trend has been blamed for exacerbating labor shortages and hurting Japan’s long-term growth potential.
Some analysts see the plan as a sign that the party is preparing to hold early general elections in the coming months to bolster support and solidify its position within the ruling party.
Political analyst Atsuo Ito said that “even the opposition party is not opposed to raising childcare spending”. “It appears that both sides are joining the race to increase sprawl spending.”