Japan Approves $29 billion as stimulus
package
Tokyo- Japan's prime minister Shinzo Abe approved $29 billion as a stimulus package on saturday to boost regional economic activity and consumer spending, right now Japan government seeking to relieve its economy from recession.
The world's third largest economy is in weaker side after an April consumption tax rise, plunge in oil price and retail sales.
This stimulus package was mainly designed to help small buisnesses, rural communities and post-natural disaster.
The measure includes shopping vouchers, subsidized heating fuel for the poor and low interest loans for small businesses hurt by rising input cost and the government estimates, this will boost gross domestic product by 0.7%
The stimulus package worth 3.5 trillion Yen($29 billion):
Of the total, 1.8 trillion Yen will be spent on measure such as, distributing coupons to buy merchandise, providing low-income household with subsidies for fuel purchase, supporting funding at small firms and reviving regional economy.
Remaining 1.7 trillion Yen will be used for disaster prevention and rebuilding post disaster areas including those affected by March 2011 Tsunami.
“With speedy implementation of the measures, i think we can bolster consumption and lift the provincial economy and expand positive growth cycle to all concerns of the country” Abe told lawmakers in a meeting before his cabinet approved the measure.
“The spending will be paid for tax revenue and unspent funds and won't need new bond issuance”, said Economy minister Akira Amau yesterday in Tokyo.
“It's better than do nothing, but I don't think stimulus will have a big impact on boosting the economy” said Masaki Kuwahara, a senior economist at Nomura Securities.
The bank of Japan expanded its already unprecendent monetary easing in October, aiming to pre-empt any risk of a delay in Japan “deflationary market”. A decline in demand following the tax increase and low in oil price put downward pressure in price, the bank said
