Japan’s Shinzo Abe doubles down to deliver world’s ‘biggest’ stimulus package

Tokyo: Prime Minister Shinzo Abe doubled Japan’s stimulus measures as he looked to deliver on his bold promise to keep businesses and households afloat with the world’s biggest virus-response package.
His cabinet approved on Wednesday a 117 trillion yen ($1.1 trillion) set of measures that includes financing help for struggling companies, subsidies to help firms pay rent and several trillion yen for health care assistance and support for local economies. The spending will be funded by a second supplementary budget that breaks a record for an extra budget set only last month.
The latest aid was finalised after data last week confirmed Japan has sunk into a deep recession and polls showed support for Prime Minister Abe’s cabinet dropping to a fresh low over its handling of the outbreak. Apparently sensing the need to do more, Abe vowed on Monday to bring the tally of measures to around 40% of gross domestic product.

“We are determined to protect the Japanese economy,” said Abe's deputy, Taro Aso, after the cabinet approved the latest extra budget. “We are facing a crisis that goes beyond the scale of the Lehman shock.”

The ramped-up support went well beyond what was expected just a week ago giving a stronger impression that the administration was pulling out all the stops to save jobs and businesses despite the spotty disbursement of earlier measures such as cash handouts and subsidies.

“When popularity goes down, politicians tend to want to do something big,” said economist Hiroshi Shiraishi at BNP Paribas SA. “These measures are designed to stop or alleviate the damage done by the pandemic on companies and individuals, not to boost growth. So even with this package, Japan’s pickup will be very gradual.”