The Finance Association (Shanghai, editor Ale), according to the Nikkei Shimbun’s report on Friday, the Japanese government plans to implement an economic stimulus plan of more than 40 trillion yen (equivalent to 350 billion U.S. dollars), which is higher than the 30% previously proposed by the ruling coalition. Trillions of yen, this scale is close to Japan’s record-setting COVID-19 assistance program in April last year.
The new Prime Minister Fumio Kishida had ordered the plan to be prepared by November 19. Japan’s ruling coalition (Liberal Democratic Party and Komeito Party) promised more economic policies in the House of Commons elections, thus promoting the increase in overall scale. This time, the central government will bear the planned expenditure of 30 trillion yen, and the rest will be borne by local governments and fiscal investment and loans.
The Nikkei News revealed several important new expenditures in the proposed stimulus plan:
1) Distribute 100,000 yen to each person 18 years of age or younger, and 2.5 million yen to each company affected by the new crown, regardless of the type of business. According to the budget, the former increased expenditures by 2 trillion yen, and the latter increased by 3 trillion yen.
2) In addition to this, the Japanese government plans to allocate another 5 trillion yen in fiscal investment and loans to university funds.
Hiroshige Seko, secretary-general of the upper house of the Liberal Democratic Party, stated that the budget previously requested by the ruling coalition was “over 30 trillion yen.” The party believes that the government needs to take measures to make up for the gap between supply and demand in the country. Based on the revised real GDP for the April-June quarter, the Cabinet Office estimates that the annual demand deficit is 22 trillion yen, and the scale of the latest economic stimulus plan far exceeds that amount.
So far, the largest emergency economic stimulus plan in Japan’s history is the 48.4 trillion yen approved by the cabinet after the outbreak of the new crown pandemic in April 2020.
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