Cabinet Office’s medium- to long-term projections under the growth strategy: It seems to claim that JPY10trn in additional fiscal spending falls within the scope of "responsible" and proactive fiscal policy

Research evidence excerpt

Cabinet Office’s medium- to long-term projections under the growth strategy: It seems to claim that JPY10trn in additional fiscal spending falls within the scope of "responsible" and proactive fiscal policy

Global Markets Research

25 June 2026Fiscal Insight

Rates - Japan

Research AnalystsCabinet Office’s medium- to long-term projections

Fiscal Policyunder the growth strategy

Masaki Kuwahara - NSC

It seems to claim that JPY10trn in additional fiscal spending falls within masaki.kuwahara@nomura.com

the scope of “responsible” and proactive fiscal policy +81 3 6703 3876

On 24 June, the Cabinet Office submitted to the Council on Economic and Fiscal Policy a

report titled “Economic and Fiscal Projections for Medium- to Long-Term Analysis under

the Growth Strategy.” The projection assumes a permanent JPY10trn increase in fiscal

spending in real terms.

An assumption of JPY10trn in additional fiscal spending

In this projection, three cases are presented under different assumptions for total factor

productivity (TFP) growth, which reflects technological progress and other factors. The

differences among the cases are interpreted as differences in the degree to which the

results of the growth strategy materialize. However, the assumptions for TFP growth in

these three cases are almost the same as those in the Cabinet Office’s medium- to long-

term projections released in January (see FiscalInsight, 23 January). In addition, the

fiscal assumptions other than the additional spending are, in principle, the same as those

in the January Cabinet Office estimates.

In other words, this latest estimate appears to be largely a reworking of the January

Cabinet Office estimates, with an additional assumption of JPY10trn in fiscal spending