Japan is considering an economic stimulus package worth more than 30 trillion yen ($265 billion) aimed at easing the pain from the COVID-19 pandemic, a plan that would require issuing new debt, Kyodo news reported.
Part of the spending will come from funds carried over from last year’s budget, Kyodo reported late on Sunday.
A government panel tasked with drawing up a blueprint for Prime Minister Fumio Kishida’s so-called new style of capitalism is expected to issue proposals on Monday that will lay the backbone of the planned stimulus package.
Kishida has promised to compile a large-scale stimulus package this month, and the government is aiming for it to be passed by parliament by the end of this year. Kishida has, however, stopped short of specifying the exact size of the spending and the amount of additional debt.
The Yomiuri newspaper reported last week spending of roughly 2 trillion yen on cash payments to households with children – or 100,000 yen per child – as part of the stimulus plan.
The government was seeking to include other measures in the stimulus package aimed at supporting consumption, which has taken a heavy hit from the coronavirus pandemic.
Some economists are now hoping a recovery in service-sector spending after the pandemic will support the world’s third-largest economy in the coming months, as a persistent global supply shortage pressures output and exports.
Among items expected to be included in the package were a restart of a domestic tourism promotion campaign and steps to realise a 10 trillion yen fund for university research, the Sankei newspaper reported on Friday.
To pay for the package, the government was likely to use about 4.5 trillion yen left over from the settling of accounts of fiscal 2020 and more than 10 trillion yen in other unspent funds carried over from that fiscal year, and would consider issuing new debt to cover any further shortfalls, Sankei said.
The government plans to roll out the extra budget for this fiscal year together with the ordinary budget for next fiscal year starting in April 2022 as a combined 15-month budget as it seeks to fund its efforts seamlessly, the newspaper said.