The new measures bring the total of Japan’s stimulus spending to 234 trillion yen ($2.2 trillion) — a staggering amount equivalent to almost 40% of the annual output of the world’s third biggest economy.
The latest package includes rent subsidies for individuals, and small and medium size businesses hit hard by the Covid-19 pandemic. The government will also pay 200,000 yen ($1,860) each to front line medical workers.
Japan will issue government bonds to fund the stimulus package.
The International Monetary Fund forecast last month that Japan’s GDP will shrink 5% this year.
In a sign Tokyo is preparing for widening fallout, the government also set aside 10 trillion yen ($93 billion) in reserves that can be tapped for emergency spending. Nearly 3 trillion yen ($28 billion) will be spent on vaccine research and the cash handouts to medical workers.
Japan’s move is one of the latest efforts by countries to unleash a massive amount of government spending aimed at helping households and businesses cope with the fallout from the coronavirus pandemic.
Germany, France, the United Kingdom, Italy, Spain and other major economies have also announced huge spending plans.
“The economic revival would be the first priority for my administration,” Abe said earlier this week, after he lifted the state of emergency in the country.
Business and social activities have been slowly returning for most of the nation. Museums and sports facilities opened in Tokyo this week, and schools will start with a phased approach in the coming weeks.
— Kaori Enjoji and Laura He contributed to this report.