TOKYO —
Japan unveiled a $48.6-billion economic package on Tuesday that includes
handouts for low-income families to help cushion the impact of rising prices
and energy costs on households.
اضافة اعلان
“We must avoid at
all costs letting surging oil and prices sabotage our efforts for the recovery
of economic and social activity from the coronavirus pandemic,” Prime Minister
Fumio Kishida said in unveiling the 6.2 trillion yen package.
Soaring energy
costs linked to Russia’s invasion of Ukraine, and other price rises are
squeezing Japanese consumers and businesses, and the decision to unleash more
spending comes ahead of a July parliamentary election.
At the heart of the
package is a plan to distribute cash handouts of 50,000 yen ($391) per child to
low-income households.
It is also expected
to include measures such as expanded fuel subsidies and the extension of a
zero-interest loan program.
Soaring energy costs linked to Russia’s invasion of Ukraine, and other price rises are squeezing Japanese consumers and businesses. ...
The spending will
be financed by tapping into reserve funds allocated for emergency spending, and
with money from other budgets already put together this year.
That makes it
“misleading” to describe the entire package as new spending, Takahide Kiuchi,
executive economist at Nomura Research Institute, said in a note.
Some analysts warn
the package could have a relatively limited impact because the measures are
short-term and will reach a relatively small number of households.
Kiuchi estimates it
will shore up GDP by 0.06 percent, while Japan’s government says the state
funds paired with private sector investment will have an economic impact
equivalent to 13.2 trillion yen.
Japan’s core
consumer prices rose at the fastest rate in over two years in March, though the
0.8 percent increase year-on-year remains far below inflation in many other
developed economies.
It is also well
short of the target 2.0 percent viewed as necessary to turbocharge the world’s
third-largest economy.
The package comes
with the yen weakening to its lowest level against the dollar in 20 years, as
the gap widens between Japan’s ultra-loose monetary policy and US tightening.
Though the weak
currency benefits Japanese exporters, it is a concern given Japan’s dependency
on energy imports, though the government has so far ruled out direct intervention.
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