Japanese Prime Minister Shinzo Abe on Friday made a widely expected decision to roll out additional stimulus spending – the latest attempt by Tokyo to revitalise a sputtering economy that has failed to break out of decades of stagnation.
Abe directed his cabinet to compile an extra budget for the current fiscal year, which will include support for rural areas hit by the Trans-Pacific Partnership free-trade deal, and cash payouts to low-income groups to spur private consumption.
“While aiming to achieve our goal of halving the primary budget deficit this fiscal year, we will compile measures that will lead directly to resolve problems Japan faces,” Finance Minister Taro Aso told reporters after a cabinet meeting.
The instruction came after the government this week unveiled two packages of steps aimed at tackling Japan’s shrinking population and easing farmers’ worries over the TPP deal.
The extra budget will focus on these measures as well as other urgent steps such as disaster restoration and payouts to low-income households, Aso added.