Japan’s government has approved a $490 billion economic stimulus package equivalent to one-tenth of the gross domestic product to boost growth.
- The package, which is almost double what analysts projected, is expected to boost small companies and in-need families. Some families with children will get cash transfers of almost $900 for each child up to 18 years, with small business support of up to $22,000.
- The stimulus package, by new Japan’s Prime Minister Fumio Kishida, does not call for major increases in taxes. Some government debt is expected to boost the spending plan.
- Economists have criticized Japan’s spending plans saying the handouts are unable to address structural issues that hold back growth, such as poor productivity. Others warn of the ballooning national debt, which rose to almost $11 trillion in September.
Japan’s economy contracted by 3% in the July to September quarter. The contraction happens for the second time in three quarters.
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