Determined to get the economy off the ropes, Prime Minister Taro Aso has ordered Finance Minister Kaoru Yosano to put together a stimulus package that would see actual spending in excess of ¥10 trillion, equivalent to more than 2 percent of the nation’s gross domestic product, Yosano said Monday.
Japan’s GDP is worth about ¥540 trillion.
It would be the biggest such shot in the arm the country has ever seen and would surpass the ¥7.6 trillion earmarked for economic stimulus steps in 1998.
“Considering the most recent plunge (of the Japanese economy), which is one of the worst among the major advanced nations . . . the prime minister instructed me to consider countermeasures on an actual spending scale of more than 2 percent of GDP,” Yosano told reporters after meeting with Aso at the Prime Minister’s Official Residence.
Aso proposed a number of areas to be targeted, including establishing a safety net for nonregular workers, ensuring adequate corporate financing, expanding solar electric power generation, easing public concerns over nursing and regional medical services, and helping municipalities revitalize the economy in their regions.
Aso also suggested the measures follow three “T principles” — to be targeted, timely and temporary — as dictated by current circumstances.
Yosano indicated the government plans to compile the package Friday. It is expected to be financed by a supplementary budget later this fiscal year.
Last week, Aso ordered the government to come up with a new set of economic measures, including drafting an extra budget. At that time Aso said the scale of the package had not been decided.
Koichi Haji, chief economist at NLI Research Institute, welcomed the Aso Cabinet’s latest policy steps.
“Although it depends on the content, we can probably expect to see some boost to the economy” from the new package, he said.
To speed deliberations, Haji also suggested the government compile measures that the opposition forces, who control the Upper House, can agree on.
On a fiscal basis, Japan’s condition is one of the worst among the world’s major developed countries. The balance of the nation’s outstanding debt was forecast to reach around 170 percent of GDP in 2008, according to an Organization for Economic Cooperation and Development survey.
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