Japan considers $92 billion stimulus to spur growth
(30 November 2019 – Japan) Japan’s government is mulling over a large-scale economic stimulus package with fiscal spending exceeding $92 billion in an effort to boost the country’s fragile recovery.
Adding strain to Japan’s tattered finances, the government will issue more bonds to fund public works spending of up to 4 trillion yen ($36.82 billion) and make up for tax revenue shortfalls as firms feel the pinch from the US-China trade tensions, the Nikkei newspaper reported.
Prime Minister Shinzo Abe’s administration will finalize the package early next week after consultations with the ruling coalition, the Nikkei said.
Ruling party lawmakers have been pressuring the government to compile a big spending package, increasing the chance fiscal policy will play a bigger role in supporting growth despite the risk of more debt issuance.
Bank of Japan Governor Haruhiko Kuroda said on Friday the central bank’s ultra-loose policy is aimed at hitting its price target, not at funding government spending, warning against complacency in getting Japan’s fiscal house in order.
Fiscal spending under the package will likely exceed 10 trillion yen, which will be funded by a supplementary budget for the current fiscal year ending in March 2020 and next year’s annual budget, the newspaper said.
The package under work will include spending for disaster relief, infrastructure building and measures to help companies boost productivity.
Aside from fiscal spending, Japan will also provide financing to companies for overseas investment to help them diversify production.