TOKYO (AFP) – Japanese Prime Minister Fumio Kishida announced a stimulus package worth more than USD100 billion yesterday as he tries to ease the pressure from inflation and rescue his premiership with his poll ratings at a record low.
Voters in the world’s third-largest economy have been reeling from rising prices since the invasion of Ukraine last year, pushing up energy costs and putting pressure on the government.
“We are seeing that the tide is turning from the vicious cycle of deflation – symbolised by low prices, low wages and low growth,” Kishida told a meeting where he revealed the size of the package would be around JPY17 trillion (USD113.2 billion).
“For the first time in 30 years, we are facing a great opportunity to move to a new economic stage,” he added.
“On the other hand, in the current situation where the rise in wages is not catching up with the rise in prices, it is necessary to support people’s disposable income temporarily so as to avoid moving back to deflation,” he said.
The government was expected to give more details later, but reports said the programme would be worth JPY37.4 trillion when including private sector spending. The plan involves income and residential tax reductions of JPY40,000 per person, and JPY70,000 cash handouts to low-income households, according to public broadcaster NHK and other local media.
Fuel subsidies will also be extended and there will be funds to promote investments in high-tech areas including the chip and space industries.