Abe's cabinet approves USD182 billion economic stimulus plan for Japan
A report on Bloomberg said the cabinet under Prime Minister Shinzo Abe recommended a massive economic package for Japan on Thursday. The cabinet members gave their approval for the economic stimulus designed to pull the economy of Japan out of deflation, and deemed the amount of the package in order to do so at JPY18.6 trillion or USD182 billion. On the other hand, the news agency pointed out that despite the massive figure, much of the funds would be in loans from government-backed lenders and expenses the local governments has spent as scheduled.
Moreover, the main highlight of the economic package is the JPY5.5 trillion Abe ordered in spending measures back in October as an economy booster ahead of an imposed national sales tax increase in April. Also, Bloomberg said in its report that the Japanese government will not be selling any new debt in order to fund such spending.
The massive economic plan had concerned economy observers that the Japanese government had not veered away from its piecemeal policymaking and stop-gap measures, of which some have credited them as cause for the delay in long-term growth.
Mitsubishi UFJ Morgan Stanley Securities senior economist Hiroshi Miyazaki said, "Market participants want the government to focus even more energy on economic policy. Some of these items, like reconstruction from the earthquake, were already scheduled and don't really constitute an economic strategy."
The Cabinet Office claimed that the measures approved on Thursday will add a percentage point to the country's gross domestic product and will create 250,000 jobs for its people.
The report by Bloomberg said the economic plan contained measures to boost the country's competitiveness, aid youth, women and elderly, increase reconstruction of destroyed infrastructure courtesy of the earthquake and tsunami events happened last March 2011, and build new infrastructure in preparation for the 2020 Tokyo Olympics.