Japan’s government is set to announce 4.6 trillion yen ($45 billion) in extra spending for the current fiscal year, according to a draft of the plan being discussed by ruling party lawmakers ahead of a cabinet meeting later Tuesday.
The spending is part of what Prime Minister Shinzo Abe has flagged as a 28-trillion yen stimulus package aimed at bolstering the economy over several years without abandoning targets to cut borrowing.
Abe revealed the overall size of the package in a speech last week, saying more investment was needed to expand the world’s third-largest economy. He said funds would be used to provide better port facilities for cruise ships and accelerate the construction of a high-speed maglev train line.
The plan includes 13.5 trillion yen of fiscal measures”•including 7.5 trillion yen in new spending starting this year, and 6 trillion yen in low-cost loans, according to the draft obtained by Bloomberg. The measures include:
3.4t yen for steps to improve demographics 6.2t yen for infrastructure 1.3t yen to mitigate Brexit risks, help smaller companies and regions 2.7t yen for relief measures for April’s Kumamoto quakes and 2011 Tohoku disaster.
Beyond the current year’s spending, the package will be made up of fiscal measures under next year’s budget along with loans that will probably be spread over several years. The package is the latest in a long series that have had limited impact on the economy, while Abe’s promised structural reforms”•tackling areas like employment regulation”•have fallen short of expectations.