Japan preparing $53 billion economic stimulus package this week: sources

TOKYO Tue Dec 3, 2013 3:57am EST

Japan's Prime Minister Shinzo Abe smiles during the Lower House plenary session of the parliament in Tokyo November 26, 2013. REUTERS/Toru Hanai

Japan's Prime Minister Shinzo Abe smiles during the Lower House plenary session of the parliament in Tokyo November 26, 2013.

Credit: Reuters/Toru Hanai

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TOKYO (Reuters) - Japan will craft an economic stimulus package this week worth about $53 billion to bolster the economy ahead of an increase in the national sales tax in April, people familiar with the process said on Tuesday.

The size of the package, ordered in October by Prime Minister Shinzo Abe, will be between 5.4 trillion yen ($52.43 billion)and 5.6 trillion yen, the sources told Reuters on condition of anonymity.

Government ministers have said the package needs to be at least 5 trillion yen to soften the economic blow of the tax hike - Japan's biggest step in decades toward curbing its enormous debt.

The government will craft an "effective" package amounting to "as much as possible above 5 trillion yen," Yasuhiro Hanashi, a parliamentary finance secretary, told a panel of Abe's Liberal Democratic Party.

The government is to decide on the measures on Thursday, but precise amounts will not be spelled out until the Cabinet approves a supplementary budget on Dec 12, the sources said.

Sources said last week that the budget, including the stimulus measures, would be worth some 7 trillion yen.

The BOJ's massive monetary easing and Abe's hefty government spending have had early success in lifting Japan from 15 years of deflation and tepid growth. ($1 = 102.9850 Japanese yen)

(This version of the story corrects package amount in second paragraph to 5.6 trillion yen from 5.5 trillion)

(Reporting by Yuko Yoshikawa and Takaya Yamaguchi; Writing by William Mallard; Editing by Shinichi Saoshiro)

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Comments (5)
Newsrocket wrote:
How many times does economist Paul Krugman have to be proven right before his policies start showing up in the right places. it’s time for “group stupid” to fade off into the fog.

Dec 03, 2013 2:58am EST  --  Report as abuse
Kailim wrote:
As of 2012 Japan’s government debt is US$9,872 billion that is 214% of its GDP and US$77,577 per capita. It is far worse than the USA. I wonder where Abe’s US$53 billion come from.

Dec 03, 2013 4:18am EST  --  Report as abuse
laurel1 wrote:
brilliant….keep doing the same dumb spend yourself to prosperity. Which doesn’t work….but 30 years of failure isn’t enough…and now the USA is trying this recipe!

Dec 03, 2013 9:56am EST  --  Report as abuse
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