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Japan preparing $120b stimulus package to bolster economy

Published : Wednesday, 4 December, 2019 at 12:00 AM  Count : 36

TOKYO, Dec3: Japan is preparing an economic stimulus package worth $120 billion to support fragile growth, two government officials with direct knowledge of the matter said on Tuesday, and complicating government efforts to fix public finances.
The spending would be earmarked in a supplementary budget for this fiscal year to next March and an annual budget for the coming fiscal year from April. Both budgets will be compiled later this month, the sources told Reuters, declining to be identified because the package has not been finalised.
The package would come to around 13 trillion yen ($120 billion), but that would rise to 25 trillion yen ($230 billion) when private-sector and other spending are included.
The Nikkei business daily reported on the weekend that the government was considering putting together a large-scale stimulus package with fiscal spending exceeding $92 billion.
Japan's economic growth slumped to its weakest in a year in the third quarter as soft global demand and the Sino-US trade war hit exports, stoking fears of a recession. Some analysts also worry that a sales tax hike to 10per cent in October could cool private consumption which has helped cushion weak exports.
Such spending could strain Japan's coffers - the industrial world's heaviest public debt burden, which tops more than twice the size of its $5 trillion economy.
Despite the headline size of the stimulus, actual spending would be smaller in the current fiscal year, and economists are not expecting much of a boost.
"We expect this fiscal year's extra budget to total around 3-4 trillion yen. We should not expect it to substantially push up the GDP growth rate," said Takuya Hoshino, senior economist at Dai-ichi Life Research Institute.    -Reuters










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