The Cabinet of Prime Minister Yoshihiko Noda will approve an ¥880 billion emergency plan Friday to boost the stagnant economy, forging the second extra spending package in two months, officials said Tuesday.
Since the Lower House has been dissolved for a general election, the move by the government to compile stimulus measures is considered a rarity and one that opposition parties are expected to criticize as being a blatant attempt by Noda’s Democratic Party of Japan to attract voters.
The government will finance the package with part of the ¥940 billion in remaining reserve funds under the fiscal 2012 budget and will not issue any new debt, the officials said.
Finance Minister Koriki Jojima briefed Noda earlier in the day on possible measures in the package, which will focus on helping growth in selected industries, including in the fields of the environment, health care and agriculture, as well as on public works projects to reduce the impact of natural disasters.
The government released a similar package last month, but the size was limited to ¥422.6 billion.
Noda has already instructed his Cabinet to compile a third package that could be financed by an extra budget for the year through March following the Lower House election, assuming his party will remain in power, despite polls suggesting the DPJ could lose to former Prime Minister Shinzo Abe’s Liberal Democratic Party.
The LDP has also targeted putting the economy back on a recovery track with stimulus measures, while pressing the Bank of Japan to pursue further unconventional monetary policy to support both the government and businesses in the battle against chronic deflation.
The economic recovery following the March 2011 earthquake and tsunami has been losing steam, with exports and production slowing amid the global downturn. The third-quarter gross domestic product contracted an annualized real 3.5 percent, adding to evidence that the economy may have slipped into a mild recession.
‘Fossil of the Day’
An international group of environmental organizations on Monday gave Japan and four other countries “Fossil of the Day” awards for not making sufficient efforts to fight global warming.
Announcing recipients on the opening day of U.N. climate change talks, the Climate Action Network gave the First Place Fossil awards to Japan, Russia, New Zealand, Canada and the United States for not committing to a new round of carbon emissions cut obligations under the Kyoto Protocol after the 2012 end of the current commitment period.
Japan, Russia and New Zealand are not participating in the second commitment period, while Canada has said it is formally withdrawing from the accord. The United States left the framework before the first commitment period started in 2008.
Announced every day during the session of a climate change conference, the award has become a familiar part of the meeting.
The climate talks are likely to face tough going because of sharp divisions between advanced and emerging economies on setting a new binding gas-reduction framework for all countries.
Japan has pointed to the need for emerging economies — meaning China and India — to also pledge to cut emissions.