Japanese Prime Minister Fumio Kishida announced a record $490 billion stimulus for the world’s third-largest economy Friday as he looks to shore up the country’s patchy pandemic recovery.
The 56 trillion yen injection, the third since the Covid crisis struck last year, “is enough to deliver a sense of safety and hope to the Japanese people”, Mr. Kishida said. The vast spending plans are expected to be approved by the Cabinet later in the day and reportedly include cash and coupon handouts to families with children under 18 who meet an income cap, as well as pay rises for nurses and careworkers. It comes after Japan’s economy shrank far more than expected in the second quarter as leaders struggled to overcome virus surges by imposing containment measures in Tokyo and other cities.
Former Prime Ministers Yoshihide Suga and Shinzo Abe poured 40 trillion yen and 38 trillion yen respectively into the economy in 2020, although some analysts have raised doubts over how effective that stimulus has been. “We have been able to build economic measures that will lead to a new society after the pandemic,” Mr. Kishida said.