Takaichi Sanae's big-spending plans are unnerving markets
She is putting the state at the centre of Japan’s economy
Takaichi Sanae, a former parliamentarian, has outlined ambitious plans to become Japan's prime minister in October 2025, and is now implementing them. She is investing heavily in public and private sectors, with a budget of ¥370trn ($2.3trn, or 55% of GDP) spread across 17 sectors between 2026 and 2041. This budgeting process allows all ministries to make multi-year requests, allowing for a record ¥143trn in the initial 2026 budget, up from the previous year's ¥122.5trn.
Her approach differs from that of her mentor, former Prime Minister Abe Shinzo, who implemented Abenomics by using monetary stimulus to fight deflation and corporate-governance reform. Takaichi's agenda, dubbed "Takaichomics," often leans on the state for support, rather than the market. She has empowered bureaucrats from the Ministry of Economy, Trade and Industry (METI) to direct investment towards critical industries, with the help of Rapidus, a government-backed semiconductor firm.
While some argue that global trends justify this approach, others, including prominent Japanese economists, are skeptical that these investments will generate sufficient growth to maintain the decline in the debt-to-GDP ratio. Additionally, Takaichi's proposed consumption-tax cut, set to take effect in April, could further strain government finances. The yen has also reached its strongest level against the dollar since February, and some American officials have criticized her expansionary policies.
Written by urgent.news from Hindustan Times - World News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
