Abe Approves $29 Bln Stimulus Package to Boost Japan’s Weakening Economy

The stimulus package includes shopping vouchers, subsidized heating fuel for the poor and low interest loans for small businesses negatively affected by rising overhead costs, while about half the money will be spent on reconstruction of various areas damaged by natural disasters in Japan.

MOSCOW, December 27 (Sputnik) — Japan’s cabinet approved a 3.5 trillion yen ($29 billion) stimulus package Saturday, aimed at boosting consumption following a sales tax increase earlier this year which led the country into recession.

“This will support private consumption and boost regional economies, so that the virtuous economic cycle spreads to all corners of the nation,” Abe was quoted as saying by Bloomberg after the decision was taken.

The stimulus package includes shopping vouchers, subsidized heating fuel for the poor and low interest loans for small businesses negatively affected by rising overhead costs, while about half the money will be spent on reconstruction of various areas damaged by natural disasters in the country, the news outlet reported.

The stimulus is expected to boost the country’s gross domestic product by 0.7 percent. Last month, Abe put on hold a further sales tax increase to 2017 after data indicated that the country had gone into a recession.

The sales tax increase was implemented in April as part of the prime minister’s set of reforms, known as the Abenomics policies, aimed at ending deflation in Japan. The policies were introduced when Abe came back to power as Japan's prime minister in 2012. Earlier this week, Abe was re-elected as prime minister and is expected to continue his Abenomics strategy.