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Japan may consider further stimulus package for COVID-19-hit economy, says minister

TOKYO (Reuters) - Japan could consider fresh economic stimulus, including a possible fourth extra budget, as the government expands a state of emergency amid a record surge in coronavirus infections, a prominent cabinet minister said on Thursday.

FILE PHOTO: Japan's Defence Minister Taro Kono attends a news conference at Prime Minister Shinzo Abe's official residence in Tokyo, Japan September 11, 2019. REUTERS/Issei Kato

“Suddenly demand has gone, so I think the government, if it is necessary, will be willing to inject money into the economy,” Taro Kono, the administrative and regulatory reform minister, said in an interview at the Reuters Next conference.

Japan has done better than the United States and Europe in managing the coronavirus outbreak, but the government must also consider growth as “we can’t kill the economy,” Kono said.

Prime Minister Yoshihide Suga on Wednesday expanded a state of emergency from the Tokyo area to seven more prefectures amid criticism that his government had acted too slowly to curb the pandemic.

Those emergency measures could last longer than the one month period initially set by the government, Kono said.

“If it is necessary the government will think about extending it of course. We need to strike the balance between managing the COVID-19 and managing the economy,” he said.

The government, which last month approved a third supplementary budget for the fiscal year through March to fund an additional $708 billion of stimulus spending, has so far committed to spending about $3 trillion to help the economy recover from its pandemic-induced slump.

Japan has the heaviest debt burden of the industrial world, with public debt more than 2.5 times annual economic output.

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Reporting by David Dolan and Tim Kelly; Editing by William Mallard, William Maclean