Japan’s Cabinet on Wednesday approved Prime Minister Fumio Kishida’s record economic stimulus package worth 107 trillion yen ($936 billion), aiming to cushion the impact of rising costs on households and businesses. The plan includes 1.18 trillion yen in direct cash handouts to low-income households, subsidies for gasoline and other energy costs, and support for small and medium-sized businesses.
The stimulus package, which is the largest in Japan’s postwar history, is aimed at easing the strain on households and businesses struggling with rising inflation and supply chain disruptions.
The plan includes measures to:
Reduce energy costs: The government will subsidize gasoline and other energy costs for households and businesses.
Provide direct cash handouts: Low-income households will receive direct cash handouts of up to 100,000 yen per person.
Support small and medium-sized businesses: The government will provide support to small and medium-sized businesses through tax breaks, subsidies, and loans.
Strengthen health and medical systems: The government will invest in strengthening health and medical systems to prepare for future pandemics.
Promote digital transformation: The government will promote digital transformation in various sectors of the economy.
The government expects the stimulus package to boost Japan’s GDP by 1.2% in fiscal 2023, which starts in April. However, some economists have expressed concerns about the potential impact of the stimulus on Japan’s already high debt-to-GDP ratio.
Japan’s debt-to-GDP ratio, which currently stands at around 260%, is the highest among advanced economies. The government plans to fund the stimulus package by issuing new bonds, which could further increase the debt burden.
The stimulus package is part of Kishida’s broader economic agenda, which aims to create a .
