Tokyo

The Japanese government adopted on Thursday an economic stimulus package worth some 26 trillion yen, including 13.2 trillion yen in new fiscal spending.

The package is chiefly designed to support reconstruction efforts in areas hit by a series of natural disasters, to deal with overseas economic uncertainty and to prepare for possible economic weakness after next year’s Tokyo Olympics and Paralympics.

The government projects the stimulus package will push up the country’s gross domestic product by 1.4 percent in price-adjusted real terms.

This is the first stimulus package in Japan since August 2016, when the government drew up a program worth 28.1 trillion yen, including 13.5 trillion yen in fresh fiscal expenditures.

The government plans to finance the new stimulus package with a fiscal 2019 supplementary budget and a fiscal 2020 regular budget.

The package features measures designed to reinforce levees of rivers at high risk of flooding and improve infrastructure in urban areas to better prepare for powerful typhoons.

Other measures include a program to help small and midsize businesses as well as farmers increase their competitiveness so they can survive the impact of the US-China trade war and the Japan-US trade pact, which is expected to take effect on Jan. 1 next year.

Also with the package, the government will provide subsidies aimed at encouraging elderly people to purchase vehicles with cutting-edge safety functions, such as automatic braking systems.

The government will also create a shopping reward point program for holders of the My Number social security and taxation identification card.

Expenditures by the central and local governments will account for 9.4 trillion yen of the 13.2 trillion yen in new fiscal spending.

The remaining 3.8 trillion yen will be financed by the central government’s fiscal and investment loan program and used for projects such as the construction of a new runway at Narita International Airport near Tokyo to cope with a growing number of visitors to Japan.

Jiji Press