Japan's New Stimulus: Boost or Burden?

Japan plans a 13.9 trillion yen stimulus package to address rising prices, despite fears of worsening public finances. It includes funds for low-income families, government investments, and child benefits. Critics question its necessity amid signs of economic recovery, and warn about Japan's burgeoning debt issues.

Japan is set to implement a new stimulus package worth 13.9 trillion yen ($89.7 billion) to counteract rising prices affecting households, a government document revealed on Thursday. The spending plan, larger than last year's 13.2 trillion yen package, risks worsening Japan's public finances, already burdened by debt twice the size of its economy.

The comprehensive package factors in nearly 8 trillion yen for government investments and spending by local authorities, totaling 39 trillion yen when private funding is included. Sources within the government, preferring anonymity due to the sensitivity of the issue, have confirmed these figures.

Critics, such as Takayuki Sueyoshi from the Daiwa Institute of Research, question the package's necessity amid growing signs of economic recovery. This sentiment adds pressure on the government to balance its fiscal plans with Japan's debt predicament, especially as the Bank of Japan steers away from its long-standing stimulus policies.

(With inputs from agencies.)