TOKYO: Japan will spend up to $30 billion in a stimulus package to revive the country’s regions but will keep new bond issuance in check, highlighting the tough balance Prime Minister Shinzo Abe must strike between lifting growth and fixing Tokyo’s tattered finances.
Abe has pledged with his landslide win in Sunday’s election giving him a fresh mandate to end 15 years of deflation, to push through his Abenomics stimulus policies including the missing third arrow of structural and fiscal reforms.
Further the premier instructed his ministers in November to lay out a stimulus package and plans to finalize it on Dec. 27, as part of efforts to pull the economy out of a recession caused by the hit from a sales tax hike in April.
Government and ruling party officials told the package to be around 3.4 to 3.5 trillion yen ($29 to $30 billion), will mainly consist of payouts to local governments and subsidies to households for fuel purchases.
Japan will spend over 3 trillion yen to revive the country’s regions. The focus on helping regional economies partly reflects Abe’s intention to garner votes in local elections to be held nationwide in April.
