Original title: Kishida hurriedly used his sword because of the severe economy
Japanese Prime Minister Fumio Kishida promoted the government to pass a resolution at the temporary cabinet meeting held on the 19th, deciding to launch a new round of economic stimulus plan with fiscal expenditure of 55.7 trillion yen. This huge fiscal expenditure hit a record high in previous economic stimulus plans.
The sword was hurriedly, just because of the severe situation. Data released by the Japanese government on the 15th showed that Japan’s actual GDP fell 3.0% in the third quarter at an annual rate. This is another negative growth in the Japanese economy after a significant decline in the first quarter of this year.
The economic downturn in the third quarter was expected by economists, but the magnitude of the decline exceeded most people’s expectations. Looking at the world, although other major economies generally decelerated in the third quarter, only Japan experienced a significant decline. From the current point of view, it is basically hopeless to achieve the government’s predetermined goal and restore the actual GDP to the level before the epidemic within this year.
The severe economic recovery situation forced the Kishida cabinet to accelerate the pace of introducing economic policies. In order to promote economic recovery, the Kishida cabinet launched a record-breaking economic stimulus plan at the fastest speed. This round of economic stimulus plan mainly reflects the contents of the Kishida cabinet’s expansion of distribution and increased economic subsidies to households and businesses. Specifically:
Eligible children under the age of 18 will be provided with a subsidy equivalent to 100,000 yen per person, and about 90% of the relevant families will benefit from this; 100,000 yen per family will be provided to families with difficulties in life; and 100,000 yen will be provided to companies with business difficulties “Business Revival Support Fund” of up to 2.5 million yen. In addition, there are: strengthening the medical system and improving the ability to respond to the epidemic; providing assistance to companies that develop new crown vaccines and drugs; setting up a 10 trillion yen university fund; increasing investment in disaster response public facilities, etc.
At the same time, in order to realize the “virtuous cycle of growth and distribution” proposed by Kishida, this plan includes factors that promote wage increases: if companies apply for government “business reconstruction subsidies” or “manufacturing subsidies” when submitting a salary increase plan , Will be approved first.
According to documents released by the government, of the total fiscal expenditure of 55.7 trillion yen, the central and local government expenditures are 49.7 trillion yen, and the fiscal investment and financing portion is 6 trillion yen. Together with the private funds attracted, the total scale of this round of economic stimulus plan is expected to be 78.9 trillion yen. Although the scale is huge, only about 20% are related to the growth strategy, while the new crown countermeasures account for nearly 60%.
After the media disclosed the main content of the economic stimulus plan on the afternoon of the 18th, the two major stock indexes of the Tokyo stock market rose rapidly. However, the upward momentum failed to continue, and the market eventually closed down. The well-known Japanese investor Takeshi Kameori said that in terms of the scale of fiscal expenditure, Kishida’s stimulus plan is impeccable, but from the market reaction, only the semiconductor sector responded well on the 19th, and the market still lacks upward momentum.
The Japanese media generally believe that Kishida’s stimulus plan focuses on subsidies that are widely applied to Yulu. What is the actual economic effect, and skeptical experts account for the majority.
Daiwa Research Institute economist Naichi said that in 2020, the Japanese government issued a cash subsidy of 100,000 yen per person to the people. Although it helped the income declining group to a certain extent, it also helped boost consumption of home appliances and automobiles. Effect. However, the total amount of 12.67 trillion yen in subsidies eventually turned into savings.
Data released by the Bank of Japan in September showed that as of the end of June this year, the total household financial assets, cash and cash deposits held by Japanese households had reached new highs since comparable statistics, due to reduced consumption and travel opportunities. Naguchi thinks that the Kishida government’s re-issue of subsidies will only further increase excessive savings.