TOKYO: The Japanese government adopted on Friday a new stimulus package worth 78.9 trillion yen to cushion the impact of the prolonged novel coronavirus pandemic on the economy.

The package, approved at an extraordinary cabinet meeting, includes record fiscal spending of 55.7 trillion yen. It is projected to boost Japan’s real gross domestic product by around 5.6 pct, according to the Cabinet Office.

The package features measures to realize a virtuous circle of economic growth and wealth redistribution, a signature policy of Prime Minister KISHIDA Fumio, such as a program to distribute benefits worth 100,000 yen for people under 19.

“We will rebuild the economy damaged by the coronavirus crisis, facilitate the resumption of social and economic activities and put the economy on a growth path as soon as possible,” Kishida said at a meeting of the Council on Economic and Fiscal Policy earlier Friday.

State funds account for 43.7 trillion yen of the total fiscal spending. The government will finance the package with a fiscal 2021 supplementary budget and the fiscal 2022 regular budget.

The extra budget will have 31.6 trillion yen in general-account spending and 400 billion yen in special-account expenditures. The government aims to adopt the extra budget at a cabinet meeting Nov. 26 for enactment by year-end.

Of the 55.7-trillion-yen fiscal spending in the stimulus package, 22.1 trillion yen will go to measures to prevent the spread of the coronavirus, and 9.2 trillion yen to programs to resume social and economic activities.

The government will also set aside 19.8 trillion yen for projects to launch a new form of capitalism, another key policy of Kishida, and 4.6 trillion yen to enhance disaster prevention and mitigation to make the country more resilient to natural disasters.

Furthermore, the government will secure 5 trillion yen in fiscal 2022 as reserve funds that the government can use without parliamentary approval to deal with the coronavirus crisis.

The package also includes a program to raise wages of nurses, elderly care workers and nursery teachers as part of Kishida’s redistribution policy.

The government will provide financial aid worth 100,000 yen to needy households exempted from residential tax payments and struggling students, in addition to the benefits for people under 19.

Cash relief of up to 2.5 million yen will be paid to small and midsize businesses experiencing revenue drops due to the coronavirus crisis.

Also planned is 500 billion yen in aid to help expand domestic production capacities for strategically important goods such as semiconductors and pharmaceuticals in order to enhance economic security. The government’s Go To Travel tourism promotion program will be resumed after a planned revision.

JIJI