Japanese Prime Minister Shinzo Abe announced a stimulus package totalling over $200 billion - to be spent over the course of a few years. The economic package will be focused on recovery and protection from natural disasters, an attempt to keep economic recession at bay, and future investment in the country’s growth. Moreover, a recent rise in the consumption tax and the risk of an economic slowdown after the 2020 Tokyo Olympics, has caused the cabinet to attempt to boost consumer spending.
Some are wary of Tokyo’s possible return to “Abenomics”, a period of extensive spending, especially as Japan is already carrying the world’s heaviest debt load. Supporters of the reform, however, claim that it is timely to implement such a policy, given that rates are at 0%. As global economic uncertainties increase, Prime Minister Abe’s new package has the potential to reduce the probability of Japan falling into recession, and furthermore, to modernize the country as a whole.
