Japan’s new finance minister Koji Omi says the country’s economy is heading out of deflation. The 73-year-old Omi is part of prime minister Shinzo Abe’s newly named cabinet in which an economics professor, Hiroko Ota, becomes economics minister.
Omi, a tax expert, said a full discussion on reforming Japan’s tax system must wait: “The timing of the rise in VAT depends on the fiscal budget and what happens with the 2006 budget and social welfare. We’ll leave consideration on VAT until autumn 2007.”
The new prime minister has inherited an economy headed for its longest expansion in 60 years.
He has promised to continue the fiscal reforms of his predecessor Junichiro Koizumi, also to cut government spending to rein in public debt and to double foreign investment into the country.
On the streets of Tokyo, Yoshinori Toma, who works in the financial sector, man welcomed that pledge. He said: “I just hope Koizumi’s reform track will continue. I’m worried Japan might go back to the pre-Koizumi times.”
While Rie Yamazaki said she was worried about inequalities in Japan. She said: “We now live in a society with widening disparities. I just want Abe to care about the poor.”
Abe, who has no economic background, has been criticised for financial policies that are too vague. By surrounding himself with experienced hands he is hoping to avoid further criticism.