Some of Japan’s top government advisers also called for stimulus to offset a decline in consumption expected after an increase in the nationwide sales tax next year
Japan’s Prime Minister Shinzo Abe called Monday for a new public works spending program to stimulate the economy amid growing concerns about global risks.
The spending, which is expected in the first half of next fiscal year starting in April, will focus on strengthening infrastructure to withstand earthquakes and frequent flooding, according to a presentation made at the Council on Economic and Fiscal Policy (CEFP).
Some of Japan’s top government advisers also called for stimulus to offset a decline in consumption expected after an increase in the nationwide sales tax in October next year.
The rush to approve public works spending and other measures to support consumption highlights growing concern among policymakers about the economy.
“The prime minister asked me to take firm measures to ensure that our economic recovery continues,” Economy Minister Toshimitsu Motegi said at the end of the CEFP meeting. “He also said the public works spending program expected at the end of this year should be compiled with this point in mind.”
Japan’s economy is forecast to contract in July-September, and a recent slump in machinery orders suggests any rebound in the following quarters is likely to be weak if exports and business investment lose momentum.
