Japan is contemplating securing an additional 100 Trillion Yen ($930 billion) to further cushion the economy from economic distortion caused by the pandemic. The government is also considering lifting a state of emergency and other restriction in Tokyo and other areas.
This new injection will go into aiding companies come out of plunge instilled by pandemic. Following outbreak of the pandemic Japan recorded a Gross Domestic Product (GDP) slump of 40%. This was the highest decline for the world’s third largest economy since Second World War.
The stimulus will be funded by a secondary supplementary budget.
60 Trillion Yen ($558 billion) will be directed into expanding state linked loan programs and private financial institutions offer to companies affected by the pandemic. Some other 27 billion Yen will be used to provide additional capital to companies hit by the pandemic.
In the first quarter of the year, Japan’s economy sank into a recession, analysts are estimating the economy will plunge further by 22% in the current quarter.
On May 14, Japan government loosened a number of social distancing measures citing declining numbers of daily new infections however, the government said Tokyo and other cosmopolitan areas still remain as hotspots for the disease.
Japan’s economy minister Yasutoshi Nishimura, says the government had received a green light from critical advisers to lift state of emergency for all remaining regions. This will be the first time in the last 45 days Japan will be completely free from state of emergency.
“While the emergency state will be lifted, it is important to expand economic activity in stages as we establish a new way of living,” said the Minister.
The minister further claimed they were advised to pay special attention to Tokyo, Kanagawa and Hokkaido since most recorded infection cases come from these areas. To date, Japan has recorded 17,000 coronavirus infection cases with 825 individuals succumbing to the deadly virus.