Japan will implement an additional fiscal stimulus plan involving more than 10 trillion yen (99.2 billion USD) of actual spending, or over 2 percent of the nation's GDP which amounts to around 500 trillion yen, Finance Minister Kaoru Yosano said on Apr. 6.
The government would compile a fiscal 2009 supplementary budget to finance the package, Kyodo News quoted Minister Yosano as telling reporters after his meeting with Prime Minister Taro Aso.
He said the government would aim to finalise the additional economy-boosting plan later this week.
PM Aso told reporters in the evening that an additional pump-priming package is necessary as Japan's economic outlook “shows the largest fall among industrialised nations” and that participants at the Apr. 2 financial summit held in London “concluded that we need to step up fiscal spending.”
The fiscal 2009 extra budget will likely be submitted to the Diet for deliberations later this month, government sources said.
If more than 10 trillion yen of actual spending is incorporated in a single extra budget, it would be the largest ever seen in Japan, Kyodo News said.
The new package is expected to surpass the 7.6 trillion yen of spending in the third extra budget for fiscal 1998, currently the largest ever.
According to the agency, Japan's economy has been shrinking faster than other major economies and the Japanese prime minister sees the need to carry out a plan for Japan to spend more than 2 percent of its GDP “to be on par with other countries.”
Japan's GDP contracted an annualised real 12.1 percent in the October-December quarter, falling at the fastest pace in about 35 years.