Japan plans $33 billion economic stimulus package for local regions: Report

An elderly man a food supermarket in Tokyo on Dec 8, 2014. Japan will spend over 3 trillion yen (S$33 billion) in a stimulus package aimed at reviving regional economies hit by slumping household spending after a sales tax hike in April. -- PHOTO: AF
An elderly man a food supermarket in Tokyo on Dec 8, 2014. Japan will spend over 3 trillion yen (S$33 billion) in a stimulus package aimed at reviving regional economies hit by slumping household spending after a sales tax hike in April. -- PHOTO: AFP

TOKYO (Reuters) - Japan will spend over 3 trillion yen (about S$33 billion) in a stimulus package aimed at reviving regional economies hit by slumping household spending after a sales tax hike in April, the Asahi newspaper said on Thursday.

Premier Shinzo Abe, given a fresh mandate to end 15 years of deflation after winning Sunday's election, had instructed his ministers in November to formulate steps to support the economy after it slipped into recession in the third quarter.

The package, to be finalised on Dec. 27, will mainly consist of payouts to local governments that will be used to subsidise household purchases of fuel and other goods, the paper said.

The government will fund the package with extra tax revenues and money left over from last year's budget, instead of issuing fresh bonds, it said.

The focus on helping regional economies partly reflects Abe's intention of garnering votes in nationwide regional elections in April next year.