Japan's Abe tells cabinet to compile stimulus package to support economy
Shinzo Abe
Japanese Prime Minister ShinzoAbeon Friday asked hiscabinettocompileapackageofstimulusmeasures tosupporttheeconomyand build infrastructure to cope with large natural disasters, the government's top spokesman said.
ChiefCabinetSecretary Yoshihide Suga told reporters that thepackagewill include steps to promote investment for growth through aggressive use of fiscal investment and loan programmes.
The government willcompilethepackageas soon as possible, though the size of spending will depend on proposals to be made by various ministries,EconomyMinister Yasutoshi Nishimura told a news conference after a regularcabinetmeeting.
"I've received an instruction from the prime minister tocompilea new economicpackageto guard against the chance overseas risks may hurtJapan'seconomy," Nishimura said.
Japanese policymakers have been under pressure to fend off heightening overseas risks with a diminishing tool-kit, as the US-China trade war and soft global demand hurt the export-relianteconomy.
Finance Minister Taro Aso said the planned economicpackageshould help enhance productivity and achieve strong growth to overcome the pressure caused by the declining population, which he said was the "biggest problem" Japan faces in the long run.
Aso added that the size and scope of thestimulusstill needed to be worked out. He suggested that a supplementary budget would becompiled by the year-end, along with an annual budget for the next fiscal year that starts in April 2020, to ensure the economicpackagewould be rolled out seamlessly over a 15-month period.
Abehad told a top economic council on Thursday that the government will consider what policy measures it can take to prevent intensifying global risks from derailing the export-reliant economic recovery.
Japan'seconomic growth likely slowed to an annualised 0.8 per centin July-September from 1.3 per centin the second quarter, a Reuters poll showed this week. The data will be reported on November14.
An increase in the sales tax to 10 per centfrom 8 per cent, put in place from October, may also hurt consumption, analysts say.
Slowing growth underscores the challenge forAbe's government as it tries to strike a delicate balance between the need to boost growth and fix the industrial world's heaviest public debt burden that is more than twice the size ofJapan's$5 trillioneconomy.
Some economists worry that additional public works spending would further strain the nation's dire public finances and aggravate a labour crunch in a fast-ageing population.