Business & Economy

Japan announces $264 billion stimulus package against rising inflation

Tokyo, Oct 28 (EFE).- Japan announced Friday an economic stimulus package worth 39 trillion yen (about $265 billion), which includes government subsidies for electricity and fuel bills, to tackle rising inflation in the country.

Prime Minister Fumio Kishida remarked that the prices of products were increasing, many of them due to increasing prices of fuel and energy.

“In tackling rising prices, we have placed a particular emphasis on energy prices,” Kishida said at a press conference.

The measures are aimed at preventing a situation similar to that seen in many parts of Europe, where prices have risen by around as much as 10 percent, according to the prime minister.

The Japanese government has announced subsidizing gas and energy bills for its population, which is expected to help households save a total of 45,000 yen, according to cabinet estimate.

Kishida also announced an aid of 100,000 yen for families with children under two years of age, with the aim of boosting the low birth rate in the country despite the current economic environment.

Japan, a country known for its years of chronic deflation, has seen a pace of inflation not seen in three decades, mainly due to higher cost of energy and raw materials, accentuated by the war in Ukraine.

The consumer price index rose three percent in September.

Kishida also announced measures to revitalize the economy and especially the damaged tourism and entertainment industry, which has been hit by the pandemic.

In this regard, the government announced a stimulus plan that will include discounts of up to 20 percent for cinema, concerts and theme parks to help the hospitality sector to recover from the impact of Covid-19.

Earlier this month, Japan lifted major border restrictions on foreign tourists, imposed during the pandemic, and gradually hopes for the sector to make steady recovery.

The archipelago also seeks to protect its SMEs and encourage a stable and sustainable rise in wages, with Kishida announcing the establishment of a new venture and investment fund in “next generation growth areas” such as semiconductors, batteries and robots to support economic revitalization.

Kishida stressed that Japan seeks to regain its position as a major manufacturer of semiconductors, a sector which he hoped will also attract more private investment.

The Japanese government hopes these measures will help boost the country’s growth and bring the country’s GDP growth to around 4.9 percent, Kishida said.

The Japanese economy grew by 0.9 percent year-on-year in the April-June quarter, mainly due to still weak consumption in the current economic scenario. EFE


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