PM Shinzo Abe launched 1 Dollar Trillion Stimulus Package
Reportedly the huge cost of the coronavirus pandemic is upending Japan's seven-year experiment to rescue the economy from its debt time-bomb, as recession fears prompt calls for "helicopter money" unlimited spending bankrolled by the central bank. Days after prime minister Shinzo Abe launched a nearly $1trillion stimulus package to battle the pandemic's financial fallout, some ruling party lawmakers are calling for even bigger spending.
Already, the government plans to boost bond issuance to a five-year high of 147 trillion yen ($1.35 trillion), or 30 per cent of the data-size of Japan's economy, to pay for the stimulus, but even as global governments and central banks pull out all the stops to reduce the economic fallout, japan is a grim reminder that a debt time-bomb may be inescapable. japan could issue even more debt, as economy minister Yasutoshi Nishimura has said the latest package won't be the last if growth remains in danger.
The missed opportunity to fix Japan's finances may squeeze spending for the younger generation and constrain the country's options for supporting one of the world's fastest-ageing populations.It also marks a death knell for Premier Shinzo Abe's fiscal policy, which relied on higher tax revenue backed by strong economic growth instead of painful spending cuts to restore Japan's fiscal health, analysts say. Growth and inflation did perk up, but the time bought by the BOJ's aggressive stimulus was not spent wisely. Abe twice delayed a sales tax increase after the first one triggered recession, forcing the finance ministry into retreat.