Japan’s government is set to target annual real economic growth of more than 1% as part of a new long-term economic strategy, an ambitious goal that would more than double the country’s average growth rate over the past five years, according to a draft policy document reviewed by Reuters.

Japan’s draft basic policy framework for economic and fiscal management aims to achieve sustainable real economic growth above 1% “as soon as possible” while maintaining nominal growth above 3%, reflecting Prime Minister Sane Takaichi’s push to revive the economy through strong domestic growth, Reuters reports.

Japan’s economy has expanded at an average real annual rate of just 0.4% over the past five years, highlighting the scale of the government’s growth ambitions.

According to Reuters, the blueprint calls for a critical shift away from years of underinvestment by encouraging greater collaboration between the public and private sectors. With a focus on strategic industries, combined public and private investment is projected to exceed 370 trillion yen (about $2.29 trillion) by fiscal year 2040.

The government also plans to increase annual private-sector capital spending to about 230 trillion yen by fiscal 2040 while expanding the size of Japan’s economy by about 1,100 trillion yen, the draft shows.

Along with its growth agenda, the policy framework reiterates Japan’s commitment to fiscal discipline. Reuters reported that as the government seeks to steadily reduce the debt-to-GDP ratio while pursuing economic expansion, the primary fiscal balance is considered a medium-term indicator for managing debt reduction targets.

On monetary policy, the draft underscores the importance of close coordination between the government and the Bank of Japan, citing legal provisions that call for policy alignment. According to Reuters, the document stresses that sound monetary policy will be crucial to achieving a strong economy, signaling the government’s preference to maintain low borrowing costs, as it could create tension with the central bank over future policy decisions.