Tokyo, Japan (4E) – In an effort to boost the economy and create 600,000 new jobs, the Japanese Cabinet has approved at least 20tn yen ($224bn) of new stimulus package.
The government will pour in 10.3tn yen ($116.8bn) on public works, financial aid for small businesses and incentives to encourage corporate investment — measures that aim to help the economy come out of a mild recession caused by slumping exports last year.
The package also includes raising military expenditures by 100bn yen ($1.1bn) from last year’s 4.6tn yen ($52.3bn) budget, the first time such increase was seen in a decade.
Prime Minister Shinzo Abe announced the decision on Friday during a news conference, stating that the plan is estimated to increase the country’s real economic growth by 2 percent.
The cabinet is expected to approve next week the 13.1tn yen supplementary budget for the current fiscal year ending in March. The new stimulus package is part of that extra funding.
Abe is pushing the Bank of Japan to apply more aggressive measures to encourage lending and meet a clear inflation target that will help the country break away from two decades of economic troubles.
A government official said that the stimulus will be funded by selling additional 5tn yen worth of bonds for the current fiscal year.