TOKYO, Dec 30 (Reuters) - Japan's government unveiled a long-term strategy on Wednesday aiming for real GDP growth averaging over 2 percent in the next decade by creating new demand in sectors such as the environment, health and tourism.
The growth strategy, which outlined key targets and policy proposals for the 10 years to the fiscal year starting in April 2020, focused on six areas, which also included Asia, science and technology, and employment. It seeks to create over 4 million new jobs.
The Democratic Party-led government, which took office in September after a landslide election victory, has vowed to cut wasteful spending and put more money into the hands of consumers to stimulate growth. But it has been criticised by market analysts for lacking a strategy to boost growth.
"We are now in a tunnel with a long downslope," the government said in the 30-page-long growth plan, criticising previous governments under the Liberal Democratic Party for failing to execute growth strategies in the past.
"What we need the most now is to show the public a vision for Japan's future ... and a political leadership that can move foward policies towards that goal."
But as doubts have grown about Prime Minister Yukio Hatoyama's ability to make tough decisions on the economy and diplomacy, support for his government has slid below 50 percent from initial highs of over 70 percent.
Hatoyama is also under a cloud over a political funding scandal.
The strategy aims to lower the jobless rate to 3.0-3.9 percent in the medium term -- which an official briefing reporters put at four years -- and boost gross domestic product to 650 trillion yen ($7,062 billion) in fiscal 2020/21 from 500 trillion yen now.
It also says the government will work with the Bank of Japan to overcome deflation.
The government last week compiled a record budget for the next fiscal year that will inflate the country's already huge debt. It has been caught between the need to keep stimulating the economy and to address concerns among investors and voters about the mountain of public debt.
In budget forecasts the government said last week the nation's economy would grow for the first time in three years in the next fiscal year, forecasting that gross domestic product (GDP) would grow a real 1.4 percent in fiscal 2010/11 after contracting 2.6 percent in the current year to next March 31.
The government plans to finalise the growth strategy next June after discussing details including how to finance measures in the strategy, possible tax incentives and when to implement proposed policies over the next 10 years. ($1=92.04 Yen) (Reporting by Yoko Nishikawa; Editing by Michael Watson)