Japan unveils record $ 490 billion stimulus to accelerate COVID-19 recovery

Japanese Prime Minister Fumio Kishida announced a record $ 490 billion stimulus for the world’s third-largest economy on Friday as he aims to support the country’s pandemic’s irregular recovery.

The 56 trillion yen injection, the third since the COVID-19 crisis occurred last year and expected to be approved by the cabinet later in the day, “is enough to deliver a sense of security and hope for the Japanese people,” he said. Kishida.

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The expenses will include various measures that include money and coupons to families with children under the age of 18 who meet an income limit, as well as salary increases for nurses.

The extensive spending plans come after Japan’s economy slowed much more than expected in the second quarter as leaders struggled to overcome the boom by imposing containment measures in Tokyo and other cities.

Former prime ministers Yoshihide Suga and Shinzo Abe have shed 40 trillion yen and 38 trillion yen respectively into the economy in 2020, although some analysts and media have raised doubts about how effective that spending has been.

“We have been able to build economic resources that will open up the new society after the pandemic,” Kishida said at political negotiations between the cabinet and a ruling coalition.

He said fiscal spending is expected to rise to 79 trillion yen including other items such as finance loans.

Kishida triumphed in general elections last month, promising to launch a huge spending program after his predecessor Suga retired, in part because of his government’s virus response.

Businesses, especially restaurants and bars, have endured months of disruptive restrictions on opening hours and alcohol sales since the pandemic began. Japan’s borders are also closed to tourists.

Government data showed this week that Japan’s economy declined by 0.8 percent in the three months to September – much worse than market expectations – as a record rise in viral cases hit spending and supply chain problems hampered trade.

However, daily cases have declined in recent months, and more than three-quarters of the population are now fully vaccinated, with most restrictions now lifted nationwide.

Economists said the stimulus will support Japan’s growth to some degree, although some media outlets have questioned the effectiveness of publications and criticized a lack of clarity on how the spending will be financed.

Japan already has a huge public debt, which amounts to 250 percent of the gross domestic product according to the International Monetary Fund.

The government should explain why the stimulus package “is necessary and what effects are expected,” Kengo Sakurada, president of the Japan Association of Business Executives, told reporters this week.

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He also noted that the Japanese Control Board says that almost half of the stimulus already implemented by previous governments has not yet been used.

“We need responsibility from the government on why this will succeed,” he said.

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