Japan Plans To Spend 1 Trillion Yen on Public Works

Japan will spend around 1 trillion yen ($9.86 billion) on public works in a stimulus package to be finalized next month, sources said, to help offset the impact of an increase in the sales tax.

Prime Minister Shinzo Abe’s cabinet is expected to approve the stimulus package, which will total around 5 trillion yen, on December 5.

The government plans to raise the sales tax in April to 8 percent from 5 percent currently to pay for growing healthcare spending.

Abe wants to use short-term stimulus spending to counter the blow to consumer spending from the tax hike.

The package is likely to contain around 200 billion yen for a temporary expansion of payments to families with children, sources with direct knowledge of the matter said.

The package will also spend about 300 billion yen on payouts to low-income earners and around 150 billion yen on subsidies for new home purchases, sources said.

Japan’s government has previously said that it will fund the stimulus package with budget reserves and higher-than-expected tax revenue so it does not have to issue new bonds.

via Reuters

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.