Japan Approves a $490 Billion Stimulus Package
The move, announced on Friday, is an attempt by the country’s newish prime minister to revive an economy battered by Covid restrictions and a supply chain crunch.
Japan approves a $490 billion economic stimulus package.
Last month in Tokyo. Japan announced a partial easing of border restrictions earlier this month and has already lifted virtually all restrictions on its economy.Credit…Charly Triballeau/Agence France-Presse — Getty Images
By Hikari Hida
Nov. 19, 2021, 6:33 a.m. ET
Japan’s government agreed on Friday to spend $490 billion on stimulus measures, a move by its newish prime minister to boost an economy battered by coronavirus restrictions and by a supply chain crunch that has affected the country’s largest manufacturers.
Prime Minister Fumio Kishida’s cabinet approved the 56 trillion yen stimulus package on Friday, less than two months after he won a runoff election for leadership of the country’s governing Liberal Democratic Party. Japan‘s economy is the world’s third largest after those of the United States and China.
The stimulus package is Japan’s largest to date and accounts for around 10 percent of its gross domestic product, officials said. Mr. Kishida said on Friday that it could increase G.D.P. by around 5.6 percent.
“I want to bring Japan’s economy, which has been severely damaged, onto a trajectory of recovery,” he told reporters on Friday afternoon.
The package includes aid to struggling businesses and hospitals, money for strengthening semiconductor supply chains, and programs to encourage domestic tourism and investment in a nationwide university endowment fund.
It also includes a one-time cash handout of 100,000 yen, or $878, per child under 18 for households where the highest-earning parent makes less than about $84,300 a year. Around nine in 10 households with children are eligible.
The cash handouts to young families are not especially popular. Critics have questioned the need for them in a country with an aging society.
Last spring, the government sent 100,000 yen stimulus checks to every resident, but they did little to raise inflation or consumer spending. Analysts estimate that around 70 percent of the handouts went to household savings.
Japan announced a partial easing of border restrictions earlier this month and has already lifted virtually all restrictions on its economy amid a falling virus caseload. Its rate of fully vaccinated people — 76 percent of the population, according to a New York Times tracker — is also one of the highest among rich nations.
But a ban on international tourists continues to weigh on economic growth.