Japan Unveils Major Stimulus Package Amid Rising Inflation Woes

Japan is set to allocate 13.9 trillion yen from its general account to fund a new stimulus package, which aims to alleviate the impact of rising prices on households. The package, totaling 39 trillion yen with private funding, could further strain public finances amidst growing debt concerns.

Japan is bracing to deploy 13.9 trillion yen ($89.7 billion) from its general account to support a sweeping stimulus package, NHK reported Thursday. This move seeks to counterbalance the rising costs affecting households, surpassing last year's 13.2 trillion yen stimulus allocation and potentially exacerbating Japan's fiscal challenges.

The generous package encompasses approximately 8 trillion yen for governmental investments and loans, combining with local government spending for an aggregate of 39 trillion yen once private contributions are factored in, according to NHK, lacking attributions. Certain initiatives propose direct aid such as 30,000 yen to exempt households and 20,000 yen per child for qualifying families.

On Wednesday, the ruling coalition overcame key impediments by securing support from a main opposition party for the proposal. However, economist Takayuki Sueyoshi of Daiwa Institute of Research questioned the necessity of such an extensive package amid signs of recovering private consumption and wage growth, warning it could hinder Japan's targets for a primary budget surplus.

(With inputs from agencies.)