Funds will be used to overcome deflation
On Thursday, December 5, the Japanese government headed by Prime Minister Shinzo Abe has approved an economic package of $ 182 billion. Funds will be used to pull the economy out of deflation, according to the information provided by Reuters.
Cabinet of Ministers reports that these measures will increase GDP by 1% and help create 250 thousand jobs. Most of the money is taken from public creditors or local authorities. The money will be spent on activities, some of which are already planned by these organizations. For example, recovery after the earthquake and tsunami of 2011at the Fukushima nuclear power plant - a measure adopted by a non-economic strategy.
In addition, the government plans to take measures to attract investment, to invest in preparations for the Olympics 2020, to support entrepreneurs, low income families and people in need. About $ 53 billion will be used to stabilize the economy after the increase in the consumption tax by 3% in April 2014.
The government expects that the tax increase will cover all the costs of stabilization. However, economists say that it will be justified only by 40%. Moreover, experts believe that the economic package is a temporary measure that will not bring the long-term growth in economy.
