Japan has approved a substantial economic stimulus package valued at 39 trillion yen ($250 billion), aimed at elevating individual incomes and stimulating growth. The package was passed by the Cabinet on Friday and serves as the cornerstone of Prime Minister Shigeru Ishiba’s newly installed administration.
This comprehensive plan includes support for digital innovation, subsidies to alleviate rising energy costs, and assistance for low-income households. The government aims to foster a sense of “well-being” among the Japanese population, as described in their official statements.
Despite Japan’s modest growth in recent quarters, the long-term economic outlook remains uncertain. The initiative also addresses critical issues such as the declining birthrate—one of the lowest among developed countries—by providing support for working women and the elderly.
One of the key components of the plan is raising the annual tax-free salary threshold from the current 1.03 million yen ($6,640), with a proposed increase to 1.78 million yen ($11,500).
According to documents from the Ministry of Economy, Trade and Industry, Japan has navigated numerous challenges over the past 30 years, including deflation, the aftermath of the “bubble economy,” the global financial crisis, natural disasters, and difficulties related to the COVID-19 pandemic.
The government asserts that signs of growth are emerging but emphasizes the need to prevent a downward spiral of falling prices akin to past episodes of prolonged deflation while ensuring sustainable wage increases.
The stimulus package promises support for small and medium-sized businesses, regional economies, agriculture, and creative industries, such as animation.
Following last month’s election, the ruling Liberal Democratic Party and its coalition partner lost their majority in the lower house of Parliament, making it essential for them to seek support from various opposition parties. Some analysts speculate that Ishiba’s tenure could be relatively short-lived given the current political landscape.
Credit: ABC News
