The economic recession caused by Covid has hit Japan hard, and the Japanese government is taking unprecedented actions to help with the recovery efforts. In order to stimulate the slow economy, Japan plans to put a 30 trillion Yen recovery stimulus into the economy. This is comparable to about $250 billion. While this is not comparable to the US stimulus's in size, it is comparable in its aim. By giving money directly to families with children, Japan plans to give 100,000 Yen per child to families in hope of stimulating both the consumption of goods and services back to their level pre-Covid.
Financing the bill will be quite different from US methods as well. Last fiscal year, Japan had a sizeable surplus that will be rolled over into this year, and the rest will be covered by issuing new debt. This is not surprising, since Japan spends a lot compared to its GDP. This large of bill is not common in Japan and the aftermath of the big purchase may have positive and negative effects for the future that we can not predict.
Source: https://www.reuters.com/world/asia-pacific/japan-economic-stimulus-seen-topping-265-bln-require-new-debt-kyodo-2021-11-08/
1 comment:
I think the effects of giving out a stimulus check in Japan will have similar effects as it had here in the U.S. I think it was beneficial for some individuals who NEEDED the money to stay afloat, but some people took advantage of the government aid and chose to not work so they could continue receiving aid. The work culture is a bit different in Japan than it is in the U.S so I do not think the government giving out a stimulus check will increase unemployment as much as it did in the U.S. Something to note could be from a financial standpoint, has Japan already bottomed out in its economy? Because if they have already reached their bottom and they are all uphill from here it could be the perfect time to invest in the country.
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