Japan to fund tourism campaign as part of new stimulus package

Despite the spike in COVID 19 infections, Asian superpower Japan plans to keep fund provisions to promote domestic tourism and dining out in its next stimulus package, according to a draft of the government’s upcoming stimulus package. There have been some concerns raised though, about the campaigns as there is a surge in the Covid cases.

Japan’s economy has been gradually recovering from its worst post-war slump caused by the coronavirus earlier this year. But it is likely to take years before the economy returns to pre-pandemic levels.

The draft stimulus package mainly aims to set up a fund to encourage investment in green technology, keeping in line with Prime Minister Yoshihide Suga’s pledge that Japan will aim for net-zero emissions by 2050. The government will also aid research and development in programs that help achieve a carbon-neutral society, according to the draft.

The outline underscores Suga’s resolve to keep businesses open, even as Japan faces a resurgence in coronavirus infections that are quickly filling up hospital beds. It also points to the dilemma policymakers face in balancing the need to support the economy without spreading the virus. The draft made no mention of the size of the stimulus package or its source of funding, which will likely be finalized in the coming days.

Some ruling party lawmakers have called for a third extra budget of up to 30 trillion yen ($290 billion) to fund the new package, which Suga instructed his cabinet to compile. The stimulus plan would follow a combined $2.2 trillion in two previous packages rolled out this year to cushion the economic blow from the pandemic.

While the previous packages responded to the immediate hit from the pandemic, the upcoming stimulus is seen focusing more on efforts to cope with the ‘new normal’ in the post-COVID era.

The new package will include subsidies for municipal governments that compensate businesses meeting requests to close shops early to contain the pandemic, the draft showed.

Source: Reuters

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