People walk by an electronic stock board of a securities firm in Tokyo on Tuesday. Photo: AP/Koji Sasahara

Gov't preparing ¥13 tril economic stimulus package

By Yoshifumi Takemoto and Tetsushi Kajimoto

Japan is preparing an economic stimulus package worth 13 trillion yen ($120 billion) to support fragile economic growth, two government officials with direct knowledge of the matter said on Tuesday, complicating government efforts to fix public finances.

The spending would be earmarked in a supplementary budget for this fiscal year to next March and an annual budget for the coming fiscal year from April. Both budgets will be compiled later this month, the sources told Reuters, declining to be identified because the package has not been finalised.

While the package would come to around 13 trillion yen, that would rise to 25 trillion yen ($230 billion) when private-sector and other spending are included.

However, the spending could strain the industrial world’s heaviest public debt burden, which tops more than twice the size of Japan’s 560 trillion yen economy.

And despite the headline size of the stimulus, actual spending would be smaller in the current fiscal year, and economists are not expecting much of a boost.

“We expect this fiscal year’s extra budget to total around 3-4 trillion yen. We should not expect it to substantially push up the GDP growth rate,” said Takuya Hoshino, senior economist at Dai-ichi Life Research Institute.

The 13 trillion yen includes more than 3 trillion yen from fiscal investment and loan programmes, as the heavily indebted government seeks to take advantage of low borrowing costs under the Bank of Japan’s negative interest rate policy.

Direct government spending is expected to reach around 7-8 trillion yen, they said.

Sources of funding the big spending remain unclear. A final decision on the package could be made as early as Thursday.

© (c) Copyright Thomson Reuters 2019.

©2019 GPlusMedia Inc.

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Sources of funding the big spending remain unclear

Tax, obviously. Future generations are going to screw when they realise their lives have already been sold off to pay for the ossans' and obachans' fiscal irresponsibility

8 ( +8 / -0 )

Sources of funding the big spending remain unclear

The 'I could care less' attitude of the populace is going to sting in the near future.

9 ( +9 / -0 )

A dwindling aging population and an exodus of manufacturing companies to China and the givers wants to spend more money on what exactly?

Care homes?

6 ( +6 / -0 )

As is always the case - this funding will go to sectors which support the election of LDP politicians.  Funding of course comes from the consumption tax - siphoned off from the social programs it was sold on.

10 ( +10 / -0 )

The cat still hasn't learned to stop chasing its tail.

6 ( +6 / -0 )

Keep on printing .....

... future generations will (NOT) appreciate it!

And who are they gonna support with all those Yen?

Most definitely not those who need it.

Take it from the poor, give it to the rich .... standard procedure for Abe and his buddies!

4 ( +4 / -0 )

More of the same useless attempts to "stimulate" the economy.

Better off just writing everyone who pays taxes in Japan a JPY 500,000 cheque.

5 ( +6 / -1 )

The Japanese financial markets' convention of using green for losses and red for gains is particularly ironic in this picture.

1 ( +1 / -0 )

Any tips on how to directly benefit from this stimulus package?

2 ( +2 / -0 )

OmachiToday  08:40 am JST

As is always the case - this funding will go to sectors which support the election of LDP politicians. 

Specifically into the bank accounts of companies with LDP-friendly owners, from which it will never re-emerge. Triple scotches and sakes all round for the good old boys!

5 ( +5 / -0 )

What was the point of raising consumption tax if it damaged the economy so much you need a stimulus package? And yet Teflon abe is not criticised or facing any kind of backlash? He’s been good for families, but let’s hope the next prime minister actually understands the basic principle if you raise taxes people will spend less.

He could easily have got more tax revenue by increasing cigarette taxes, JT clearly have some unbelievable control over the government..

4 ( +4 / -0 )

Running the economy into the ground is not good for families.  Nor is leaving an increased national debt.  Abe's arrows are all broken.

3 ( +3 / -0 )

There is nothing you can do about it.

Instead of complaining, hoard what you can from this for the future.

0 ( +0 / -0 )

More roads to nowhere, Aso cement Ltd must be happy, no conflict of interest though.

1 ( +1 / -0 )

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