Japanese Prime Minister Shinzo Abe is reportedly readying a $182 billion economic package this week in his latest bid to pull the world’s third largest economy out of deflation, but the new measures will not require the government to sell more debt. The package, to be approved by Abe’s government on Thursday, will have a value of 18.6 trillion yen, this according to government sources on Wednesday.
The package is at par with Abe’s initial 20 trillion yen burst of spending early this year as part of his campaign to end 15 years of falling prices and tepid growth for the Japanese economy. Sources say that the bulk of the package includes loans from government-backed lenders, spending by local governments and corporations. The headline figure usually announced by the Japanese government on economic measures often includes spending that has already been committed, and tends to far exceed the amount of actual new government spending. The core of the package will be spending measures that the prime minister ordered in October to serve as buffer for the economy ahead of a national sales-tax hike in April, the sources revealed on condition of anonymity.
Government officials said that the main stimulus steps would be worth around 5 trillion yen. This amount will not require new debt as it will be covered by tax revenues that have exceeded initial budget projections due to the economic recovery that Abe himself kickstarted when he took office, as well as using unspent funds from other accounts, the sources said. These financial measures also include steps intended to boost competitiveness; assist women, youth and the elderly; accelerate reconstruction from the March 2011 earthquake and tsunami; and build infrastructure for the 2020 Tokyo Olympics.
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