(.)
By Takaya Yamaguchi and Leika Kihara
TOKYO, Nov 12 (Reuters) – Japan’s economic stimulus package will require fiscal spending worth 40 trillion yen ($ 350 billion), the Nikkei business daily reported on Friday, and a draft of the spending plan reviewed by Reuters presents measures to ease the impact of rising oil prices.
Prime Minister Fumio Kishida, his position strengthened by an election victory last month, promised to compile a stimulus package “worth several tens of trillion yen” by November 19 in order to boost the world’s third-largest economy. world, which is recovering from the coronavirus pandemic.
Spending is likely to be funded by some new bond issues, adding to the heaviest public debt in the industrial world – more than twice the size of Japan’s economy – as Kishida prioritizes recovery from the pandemic over tax reform.
Analysts were surprised by the higher-than-expected spending plan.
“Spending is much larger than the 22 trillion yen output gap. (Kishida) must be under pressure to boost spending ahead of the upper house elections next summer,” said Saisuke Sakai, senior economist at Mizuho. Research and Technologies.
Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, said that despite the higher spending, the impact would be limited on the markets as the Bank of Japan would keep borrowing costs low in line with its policy of controlling debt. yield curve.
Rising global oil prices, as well as shortages of chips and supply chain constraints, undermined a trade-dependent economy that shrank in the third quarter as pandemic restrictions and bottlenecks supply bottle damaged consumption and production.
“We will prepare flexible measures on rising energy costs in the next stimulus package,” Economy Minister Daishiro Yamagiwa told the media on Friday.
“The steps will focus on sectors such as agriculture, forestry and fishing, as well as logistics companies, which cannot earn a living without using fuel,” he explained.
Other measures that will be included in the package seek to increase the national production of semiconductors and the creation of a fund of 10 trillion yen (87.5 billion dollars) aimed at providing universities with more resources to promote scientific and technological research, showed the draft.
The spending plan will also get a boost from cash payments to citizens 18 and under, which would cost about 2 trillion yen, and small businesses hit hard by the pandemic, to a total of about 3 trillion yen. reported the Nikkei.
The program includes measures to reactivate tourism promotion and stimulate demand after the pandemic.
($ 1 = 114.0500 yen) (Reporting by Takaya Yamaguchi; Additional information by Kantaro Komiya, Sakura Murakami and Tetsushi Kajimoto. Edited in Spanish by Marion Giraldo)