Japan’s Prime Minister Fumio Kishida has announced the stimulus package worth approximately USD 490 billion to boost the post-pandemic economy.
The economic plan includes USD 880 payments for those aged 18 years or younger and aid for ailing businesses, Al Jazeera reported.
“The package has more than enough content and scale to deliver a sense of security and hope to the people,” Kishida told reporters.
Further, Tokyo’s move bucks a global trend towards withdrawing crisis-mode stimulus measures and put more pressure on the country’s fragile finances.
According to Al Jazeera, spending has ballooned due to an array of payouts, including some criticised for being unrelated to the pandemic, and will likely lead to additional bond issuance this year, analysts said.
On another hand, Kishida who is considered fiscal conservation has been forced to do redistributing the economy.
The Japanese government will announce details of the package after it is signed off at a cabinet meeting on November 26.
Japan has lagged other economies in pulling out of pandemic-induced doldrums, forcing policymakers to maintain enormous fiscal and monetary support even as other advanced nations dial back crisis-mode policies.
Policymakers hope the new spending will help underpin the economy, which shrank more than expected in the third quarter due to the hit to consumption and exports from pandemic curbs and global supply disruptions.
Japan’s three gigantic spending packages to counter the pandemic have left it with outstanding long-term debt roughly double the size of its USD 5 trillion economies.
Further, it will have an impact on Japan’s defence budget in the near future as the island nations wish to control China’s presence in the Indo-Pacific region.