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Statement by Prime Minister Junichiro Koizumi on the "Basic Policies for Economic and Fiscal Management and Structural Reform 2005" (Cabinet Decision)

June 21, 2005

With the progress made in the structural reform, the target for the disposal of non-performing loans has been attained, the profitability of the corporate sector has improved, the unemployment rate has fallen, and moderate recovery has been realized driven primarily by private-sector demand. As indicated by these developments, the Japanese economy has emerged from the so-called "post-bubble" period.

Nonetheless, the Japanese economy and society are faced with significant changes in the environment, such as the advent of a full-fledged population decline and super-aging society and the advancement of globalization on a global scale.

The "Basic Policies for Economic and Fiscal Management and Structural Reform 2005" that have been decided today identify the following as challenges to be tackled in the next two years: 1) to create a "small and efficient government;" 2) to create a foundation that will allow Japan to tide over the declining birthrate, aging population and globalization for the dynamic new era to come; and 3) to overcome deflation and make private demand-led economic growth more certain.

The Government will accelerate its efforts for the structural reform in line with the "Basic Policies 2005" to ensure that Japan responds appropriately to the trend of the times and establishes a new foundation for growth. In this, I ask for the understanding and cooperation of the people of Japan.