Japan lays out ¥5.5 trillion stimulus package : track to exit deflation

TOKYO 

The Japanese government unveiled details of a ¥5.5 trillion ($53.9 billion) spending package to mitigate the expected drag on the economy from an upcoming sales tax increase in April, bundling steps to encourage corporate investment and employment, as well as handouts for low-income households

Prime Minister Shinzo Abe had instructed his government to compile the package in October when he decided to raise the 5% sales tax to 8% in April
The government said the measures will have an ¥18.6 trillion economic impact and should lift gross domestic product by 1 percentage point
“With this package and other economy-supporting efforts, we can make sure we remain on track to exit deflation,” Abe said
The latest measures are the second set of extra spending steps compiled by the Abe government, following a ¥10.3 trillion package in January
“Flexible” fiscal spending is one of the three “arrows” — or pillars — of Abe’s economic program aimed at defeating deflation
“The size of our package is large enough to override a drop in spending stemming from a rush in demand ahead of the tax hike, which economists say will be around ¥2 trillion,” Economy Minister Akira Amari said in October. “We won’t be wrong to make it too large.”
The main elements of the package include ¥1.4 trillion for measures to promote capital investment by enterprises in preparation for Tokyo 2020 Summer Olympic Games, ¥300 billion for steps to create jobs for young people and women, and ¥3.1 trillion to fund reconstruction from the March 2011 earthquake and repair aging infrastructure across the nation
The government also set aside ¥600 billion for subsidies to low-wage earners