The government of Japanese Prime Minister Shinzo Abe on Thursday approved a 13.2trillion-yen, 121-billion-dollar, fiscal stimulus package to prop up the nation’s economy.
The government calls the first stimulus package since August 2016 a “15-month budget” and aims to counter possible sluggish demand following a recent tax hike, slow growth due to international trade disputes and an expected slowdown after the 2020 Tokyo Olympics and Paralympics.
The package is aimed at reinvigorating the economy by encouraging cashless payments, and beefing up the nation’s preparedness for natural disasters, such as that seen with Typhoon Hagibis in October, which killed more than 90 people.
It also includes reconstruction projects for areas devastated by Typhoon Faxai in September and Hagibis.
The government “has compiled a powerful package” in order to help overcome economic downside risks, the prime minister said in a meeting with cabinet officials and ruling party lawmakers.
The economy grew by 0.2 per cent in the July-to-September quarter amid weak consumer spending, even before the government raised the consumption tax to 10 per cent on Oct. 1 from 8 per cent.
Since Abe took office in late 2012, his government has failed to produce solid economic growth as consumer spending slows and wages stagnate.
In October, the Bank of Japan revised down the nation’s economic growth outlook to 0.6 per cent for the current financial year, ending March 2020, from the 0.7 per cent predicted in July.