Dec. 9 – Japan has approved a 7.2 trillion yen (US$80.6 billion) economic stimulus package to help resist another recession as other countries in the region taper down their stimulus packages for next year.
The spending will be geared towards improving employment, providing additional funding for small and middle sized firms and encouraging more domestic consumption particularly for environmentally friendly products. This will also include a US$39 billion allocation for regional economic support and public works projects.
Xinhua reports that the package will serve as a preemptive strike against a double-dip recession occurring ahead of the upper house elections in mid-2010, as the yen strengthens against the dollar and mild deflation grips the economy.
It will also serve as a possible buffer for when tax receipts for local governments are expected to be much lower. The Japanese economy as a whole has been on the decline with slower exports, expansion and industrial production and the economy is expected to decrease by 5.4 percent this year.
Despite this, it remains the second largest economy in the world after the United States. The package will also place importance on environmental programs that provide incentives to buy energy-efficient cars and appliances as well as loan guarantees to tide small companies strapped for credit.
