Japan PM unveils $490bn stimulus package

Prime Minister of Japan, Fumio Kishida, unveiled a record-breaking stimulus package which approximately equals to 56 trillion Japanese yen.

Key Points

  • Japanese government will also compile an extra budget by the end of 2021, to fund the stimulus programme in order to deliver necessary aid to the public.
  • The plan comprises of 100,000-yen payments for people aged 18 years or younger.
  • It also includes aid for ailing businesses, Kishida and other politicians.
  • The package also comprises of enough content and scale for delivering a sense of security and hope to the people.
  • This stimulus bucks a global trend in withdrawing crisis-mode stimulus measures. It also places further strain on Japan’s already tattered finances.

Size of Spending in Japan

The size of spending was greater than 30-40 trillion yen, as estimated by markets, because of huge pay-outs to households & firms hit by covid-19 pandemic.  Thus, the government will compile an extra budget of around 32 trillion yen to fund part of the cost. It comprises of spending for defence of $6.7bn, in the backdrop of China’s growing economic and military power.

How Japan lagged?

Japan has lagged other economies in getting out of pandemic-induced economic crisis. This forced policymakers to maintain enormous fiscal and monetary support even though other nations introduced crisis-mode policies.

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