Japan is set to announce a record $490 billion spending package on Friday to cushion the economic blow from the COVID-19 pandemic, bucking a global trend towards withdrawing crisis-mode stimulus measures and adding strains to its already tattered finances, APA reports citing Reuters.
Spending has ballooned due to an array of payouts including those criticised for being unrelated to the pandemic, such as cash handouts to households with youth aged 18 or below, and will likely lead to additional bond issuance this year, analysts said.
The massive spending would underscore the resolve of Prime Minister Fumio Kishida - once considered a fiscal conservative -to focus on reflating the economy and redistributing wealth to households.
"The reflationary monetary policy and go-big-or-go-home fiscal policy pioneered by (former Premier) Shinzo Abe is now the orthodoxy," said James Brady, an analyst at Teneo.
"Though Kishida has been known in the past for being somewhat hawkish, he appears set to continue the Abenomics paradigm for several more years."
In a meeting of government and ruling-party executives on Friday, Kishida announced his plan to spend around 56 trillion yen ($490 billion) in the stimulus package, and compile an extra budget by year-end to fund the measures.
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