Japan will compile a fresh 73.6 trillion yen ($708 billion) economic stimulus package to speed up the country’s recovery from its deep coronavirus slump, Prime Minister Yoshihide Suga said on Tuesday.
The new package will include about 40 trillion yen in direct fiscal spending and initiatives targeted at reducing carbon emissions and boosting digital technologies, Suga said in a meeting with ruling party executives.
Policymakers globally have unleashed a wall of monetary and fiscal stimulus to prevent a deep and prolonged recession as the coronavirus closed international borders and sent millions out of work.
In the United States, a $908 billion coronavirus aid plan is currently under debate in Congress.
Suga’s cabinet is set to endorse the stimulus package later on Tuesday, which would bring the combined value of coronavirus-related stimulus to about $3 trillion.
Two previous packages this year worth a combined $2.2 trillion focused on dealing with the immediate strain on households and business from the pandemic.
“We have compiled these measures to maintain employment, sustain business and restore the economy and open a way to achieve new growth in green and digital areas, so as to protect people’s lives and livelihoods,” Suga said at the meeting.
The plan includes a 2-trillion yen fund to promote carbon neutrality by 2050, 1 trillion yen to accelerate digital transformation and 1.5 trillion yen in subsidies to support restaurants hurt by shortened trading hours due to Covid-19.
Investment in digital and green initiatives is an area Suga has laid out as his key priorities.
Japan’s economy, the world’s third-largest, rebounded in July-September from its worst postwar contraction in the second quarter, though many analysts expect a third wave of Covid-19 infections to keep any recovery modest.