Japan approves $141 billion stimulus to boost economy, offset living costs
Subscribe to enjoy similar stories. TOKYO—Japan’s cabinet on Friday approved an economic stimulus package worth more than $140 billion, in Prime Minister Shigeru Ishiba’s latest push to tackle inflation and boost growth after his coalition suffered a bruising electoral defeat last month. The package totalling 21.9 trillion yen, equivalent to $141.71 billion, is aimed at easing rising living costs and promoting business innovation and investment.
The government estimates that, when factoring in private-sector spending as a result of the stimulus, the package’s impact could be as much as ¥39 trillion. Ishiba has said his government will focus on getting the economy to completely exit deflation and create growth driven by higher wages and investments. But he faces a bumpy road ahead in steering policy after the ruling coalition lost its majority in the lower house of parliament following a general election in late October.
Under the new economic package, the government will give cash handouts of ¥30,000 to low-income households as an inflation-relief measure, with an extra ¥20,000 per child to be given for families with children. The government is also planning to resume subsidies for gas and electricity bills from January to March next year. The cabinet estimates that the energy subsidies will reduce consumer prices by a monthly average of 0.3 percentage point from February to April.
The government has intermittently provided energy subsidies since January 2023, which has been a major factor affecting consumer inflation trends. Underlying inflation, which excludes fresh food and energy prices, rose 2.3% in October from a year earlier, government data released Friday showed. In an attempt to reinforce chip supply chains and
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