TOKYO, Nov. 19 (BNA): Japan’s prime minister on Friday outlined a record 56 trillion yen, or $490 billion, stimulus package, including cash aid and aid for distressed businesses, to help the economy out of a recession exacerbated by the coronavirus pandemic.
“The package has enough content and scope to give a sense of security and hope to the people,” Prime Minister Fumio Kishida told reporters.
Kishida’s proposal is put for approval by the Cabinet later in the day, but it still needs parliamentary approval. Kishida promised swift action and parliament is expected to meet next month.
Kishida and other politicians said the plan includes providing 100,000 yen ($880) each in cash assistance for those 18 and under, and helping distressed businesses.
Japan has never been under a full lockdown during the pandemic, and infections have remained relatively low, with the number of COVID-19-related deaths at around 18,000. But the world’s third-largest economy was already in recession before the pandemic hit.
The government is considering restarting its “GoTo Travel” campaign for discounts in restaurants and stores, designed to encourage domestic travel. The campaign, which began last year, was halted when COVID cases began to rise.
Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities, said the government needs to focus on increasing spending again, and the GoTo campaign may prove effective.
The Japanese economy contracted at an annual rate of 3% in the July-September period, largely due to weak consumer spending. Analysts say the economy is unlikely to recover until next year.
Japan also promised spending for vaccine research after it faced criticism over its reliance on imports for coronavirus vaccines. It has so far approved vaccines from Pfizer, Moderna and AstraZeneca.
Kishida, who had promised “new capitalism” for Japan, took office in October. His predecessor Yoshihide Suga resigned after just one year in office, largely due to widespread public discontent over his inept response to the pandemic.
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