Japan plans record 60 trillion yen stimulus as coronavirus spreads

Commuters with masks on their way to work at a station in Tokyo on March 31, 2020. PHOTO: EPA-EFE

TOKYO (BLOOMBERG) - Japan's ruling party proposed the country's biggest-ever stimulus package worth 60 trillion yen (S$789 billion) as the spreading coronavirus locks the economy in a recession.

The sum includes 20 trillion yen in fiscal measures with private initiatives and other elements likely making up the rest, according to the proposal by the Liberal Democratic Party on Tuesday (March 31). More than 10 trillion yen, or the equivalent of a 5 per cent cut in the sales tax rate, would be handed out to the public in a combination of cash, subsidies and coupons, according to the plan.

"Quite a few in the party hold the view that this still isn't enough," said Mr Fumio Kishida, the party's policy chief, who submitted the proposal to Prime Minister Shinzo Abe. "I asked the premier to take leadership on this matter and put together an even bigger number for our policy response." More economic measures would be considered if needed, he added.

Mr Kishida said on Monday that a series of packages could eventually amount to 100 trillion yen.

The latest package would be equivalent to more than 10 per cent of the nation's gross domestic product and calls for corporate funding measures worth more than 40 trillion yen, according to the plan. It also says the party tax panel will consider consider tax payment deferrals and cuts.

The proposal comes after December's 26 trillion yen stimulus package and two rounds of emergency measures this year aimed at assisting businesses and workers affected by the virus.

Join ST's Telegram channel and get the latest breaking news delivered to you.