Ja­pan govt eyes $87.87bn stim­u­lus

Gulf Times Business - - BUSINESS -

Ja­pan’s govern­ment is con­sid­er­ing a stim­u­lus pack­age worth around ¥10tn ($87.87bn) to offset the im­pact of a sales tax hike next year and to in­crease pub­lic works spend­ing af­ter a se­ries of nat­u­ral dis­as­ters, three sources said.

Some of the funds would go to­ward mea­sures pre­vi­ously an­nounced, such as tax breaks for car pur­chases and shop­ping vouch­ers to help low-in­come house­holds, the sources said.

The govern­ment is also lean­ing to­ward spend­ing more on in­fra­struc­ture and dis­as­ter preven­tion as some of­fi­cials grow wor­ried about the need for some­thing to offset grow­ing global risks, said the sources, who de­clined to be iden­ti­fied be­cause the pack­age has not been fi­nalised.

It is pos­si­ble for the govern­ment to spread out this spend­ing over more than one year, the sources said.

The na­tion­wide sales tax is sched­uled to rise to 10% in Oc­to­ber 2019 from 8% cur­rently.

Prime Min­is­ter Shinzo Abe has al­ready said he will ex­empt food and some daily goods from the tax hike to soften the blow, but there is still a lot of con­cern that the tax hike will wreck con­sumer spend­ing and sen­ti­ment, the sources say.

The tax hike could cost cit­i­zens around ¥5.6tn, ac­cord­ing to an es­ti­mate from the Bank of Ja­pan. Some of­fi­cials want to take steps to offset this bur­den as much as pos­si­ble, the sources said. The stim­u­lus pack­age could raise con­cerns about Ja­pan’s pub­lic debt bur­den, which is al­ready the worst among ma­jor economies at twice the size of its $5tn econ­omy.

Newspapers in English

Newspapers from Qatar

© PressReader. All rights reserved.