Japan Approves $260 Billion Plan to Fight Inflation, Spur Growth

The Prime Minister of Japan, Fumio Kishidaannounced this Friday a stimulus plan to cushion the impact of inflation on the population and the weakness of the yen for 260,000 million dollars.

The government expects budget spending of 39 trillion yen (about 260 billion dollars), which if private sector investment is taken into account amounts to 72 trillion yen, Kishida said after his cabinet approved the program.

This is a comprehensive economic plan aimed at fighting inflation and revitalizing the economy,” Kishida told a news conference.

“We want to protect livelihoods, jobs, our businesses, all of this strengthening our economy for the future,” he added.

The government is especially looking for measures to alleviate household energy bills, encourage companies to raise wages and support the economy in the different regions of the country.

Prices are rising in the world’s third-largest economy at their fastest pace in eight years, though the 3% inflation rate is well below other countries, and the yen has lost more than 20% of its value against the dollar since the beginning of this year.

“We want a speedy adoption” of this plan that will be submitted to Parliament, Kishida told television in the morning.

Already with the world record for public debt relative to gross domestic product, Japan increased this slab in the last two years with multiple initiatives to mitigate the impact of the coronavirus pandemic. Covid-19.

Despite high inflation, the Bank of Japan it kept its ultra-loose monetary policy in contrast to other major central banks that raised interest rates to curb rising prices.

This strategy has plunged the value of the yen to a 32-year low against the dollar and prompted the government to intervene to protect the currency.