TOKYO (Reuters) – Japan’s cabinet approved on Wednesday a fresh stimulus package worth $1.1 trillion, among the world’s largest fiscal plans to cushion the economic blow from the coronavirus pandemic.
A man wearing a protective mask travels in a subway amid the coronavirus disease (COVID-19) outbreak in Tokyo, Japan, May 27, 2020. REUTERS/Kim Kyung-Hoon
Direct spending measures will make up 33 trillion yen of the 117-trillion-yen ($1.1-trillion) package, with the rest mostly set aside for state-affiliated banks to offer financial aid to firms hit by the virus.
The package follows Japan’s first virus stimulus, also of 117 trillion yen, compiled in April and centering on cash payouts to households and steps to counter immediate damage from the pandemic.
Here is a breakdown of spending measures in the new package:
CORPORATE FUNDING SUPPORT
This is the biggest component, with 11.6 trillion yen earmarked to extend loans to small and mid-sized firms in need of immediate cash to keep businesses running.
It will include 2.4 trillion yen to ramp up a pool of funds that can be tapped to inject capital into companies that may otherwise go under from slumping sales.
About 3 trillion yen will go for payouts to doctors and nurses treating coronavirus patients, distribution of masks and other medical supplies, as well as the costs of developing vaccines and new medicines.
A fund of about 2 trillion yen will offer subsidies to tenants struggling to pay rent due to slumping sales or income because of the virus.
As much as 4.7 trillion yen will be spent on other measures, such as payouts to low-income single parents, artists and those in agriculture industries, as well as helping schools prepare to re-open.
The figure includes 2 trillion yen for additional grants to local governments to cover region-specific needs in tackling the pandemic.
About 10 trillion yen is set aside as emergency reserves.
Reporting by Takaya Yamaguchi and Leika Kihara