Tokyo, Japan (4E) – Just weeks ahead of the elections where the ruling party is likely to lose, Japanese Prime Minister Yoshihiko Noda’s cabinet on Friday approved an economic stimulus package worth $10.7bn.
The latest stimulus figure is more than double compared to the amount announced in October as Japan once again heads for the polls that could see its seventh prime minister in the last six years.
The planned new spending would focus on improving certain areas like health care and agriculture, as well as on infrastructure projects following last year’s quake-tsunami disaster.
Recent polls indicate that opposition leader Shinzo Abe of the Liberal Democratic Party is set to unseat Prime Minister Yoshihiko Noda of the Democratic Party of Japan.
Abe has indicated that he supports plans to spend significant amount of public funds on public works and apply pressure to the Bank of Japan to aggressively ease monetary policies to spur growth if he is elected on the Dec. 16 elections.
The Japanese economy contracted in the quarter ending September, putting the country closer into recession and derailing its quest for a full recovery after last year’s disaster.
On Friday, positive data emerged showing Japan’s factory output growing by 1.8 per cent in October, rising for the first time in four months and beating estimates of a 2.2 per cent decline.