Japan’s prime minister Shinzo Abe has rolled the dice on the fate of his government with a huge spending package designed to jolt the world’s third largest economy out of years of sluggish growth.
Mr Abe hopes the 10.3 trillion yen (€87 billion,) spree will create 600,000 jobs and add 2 per cent to Japan’s real economic growth. “Reviving the economy is our priority,” he told the nation yesterday after his cabinet approved the emergency budget. Spending by local governments and the private sector is expected to double the package.
Much of the money will be spent on public works, modernising infrastructure and preparing the country for natural disasters, as well as business incentives.
The government has also promised to kick-start stalled reconstruction of Japan’s northeast, devastated by the March 2011 earthquake, tsunami and nuclear accident.
Mr Abe, who led his Liberal Democratic Party back to power last month, is gambling that he can pull the economy out ifs fifth recession in 15 years and end persistent deflation before a key July election.
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