The plan should have the green light by the parliament in early January, but it is a passage granted, given the strong majority enjoyed by Abe after the early elections of 14 December. The premier said that the package aims to create “a virtuous circle of growth.”
The package includes measures to 1.2 trillion yen to support small and medium enterprises as well as measures to stimulate private spending while 600 billion will be allocated to local communities. The remaining 1.7 trillion will be spent on disaster prevention and recovery in the north-east of Japan, hit by the earthquake and tsunami in March 2011.
The government plan provides subsidies to the administrations of the prefectures most affected to address the stagnation of local economies and the depopulation of villages. The grants will be allocated to subsidies for purchases of goods, a good fuel and contributions for those who want to move to rural areas.
The government of Shinzo Abe – who vowed last Wednesday for a third term – also aims to new public infrastructure projects in remote regions.
Overall, the goal is a stimulus of around 0.7% of GDP Japan. But critics fear that the new package – intended to weigh down the already colossal Japanese government debt, amounting to nearly 240% of GDP – can have only temporary effects.
December 27, 2014 17:52 – Last Updated: 18:31
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