Japan’s government formally unveiled its latest fiscal plan Friday, a package of spending and tax reductions valued at $154 billion that’s intended to help rescue the economy from its biggest slump since World War II.
The stimulus package, a record for a supplemental spending bill in Japan, is the third to come to light since Prime Minister Taro Aso took office last September, about the time global financial markets unraveled.
Aso said the spending should boost, by two percentage points, growth in Japan’s gross domestic product for the current fiscal year that began this month.
Finance Minister Kaoru Yosano told reporters on Friday the government will sell new debt worth more than $100 billion to raise the money for the package.
He added that failure to ramp up stimulus spending could translate into the Japanese economy suffering a sharp contraction.
“If we sit idly, the economy would contract 6 percent to 7 percent” in the year, Yosano said.