Japan mulls additional $1.1 trillion stimulus to cushion COVID-19 fallout: Report

The Japanese government will reportedly inject a fresh stimulus package worth $1.1 trillion to minimise the economic fallout due to the ongoing coronavirus pandemic. According to media reports, the stimulus package will on top of a $1.1 trillion package already rolled out by the government last month, taking the total expenditure to cushion the virus fallout to roughly 40 per cent of country’s Gross Domestic Product (GDP).

The new package will include a sizeable amount of direct spending with more subsidies to struggling companies, support for students, firms struggling to pay rent, and increased expenditure on healthcare. During a meeting with lawmakers on May 27, Prime Minister Shinzo Abe emphasised on the necessity to protect businesses and employment by any means, adding that the government must also be ready to tackle another wave of the epidemic.

Japan has reported 16,623 confirmed cases of coronavirus and 846 deaths related to it so far. The significant decline in the coronavirus cases prompted Abe to lift the nationwide state of emergency on May 25 which was imposed earlier in April to stem the spread of COVID-19. Japan’s dependency on trade with China and the United States has made it extremely vulnerable to the pandemic, pushing it into the deepest postwar slump.

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'Phased easing'

While announcing the state of emergency on May 25, Abe said that the government cannot reduce the risk of the spread of infections to zero, adding that a certain transitional period will be set to increase socio-economic activities in a phased manner while controlling the risk of infections. He said that the government will assess the epidemiological situation and the risk of the spread of infections, around once every three weeks.

“This phased easing is premised on the establishment of the New Lifestyle and the implementation of the Industry-specific Guidelines on preventive measures, among other steps,” he added.

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(With agency inputs | Image: Twitter / JPN_PMO)