Free Newsletters - Space News - Defense Alert - Environment Report - Energy Monitor
by Staff Writers
Tokyo (AFP) Jan 15, 2013
Japan on Tuesday approved an extra budget that includes issuing $87.8 billion more debt to help pay for a massive stimulus package aimed at breathing life into the world's third largest economy.
The 7.8 trillion yen bond sale is part of a wider $226.5 billion stimulus package, partly financed by local governments and the private sector.
It has stoked fears about spending by Tokyo, which already owes creditors cash equal to twice the size of its economy.
The debt-financing package announced Tuesday includes 2.6 trillion yen in bonds specifically to cover gaps in the national pension scheme. The rest of the debt will pay for the national government's share of the stimulus.
The total extra budget amounts to 13.1 trillion yen.
The new government led by Shinzo Abe, which swept to power last month, has pledged to fix the long-ailing economy with big spending and pressure on the central bank to launch aggressive easing measures.
Abe, who has tangled with Bank of Japan governor Masaaki Shirakawa on policy, said he wants the BoJ to set a two percent inflation target to drag Japan out of the deflation that has haunted its economy for years.
The yen has tumbled to multi-year lows against the dollar and euro while equity markets have soared on the speculation about monetary easing and hopes Abe's government will succeed where other administrations have failed.
"We're giving our top priority to such issues as the strong yen and ways to get out of deflation," Chief Cabinet Secretary Yoshihide Suga, the government's top spokesman, told reporters after the budget was approved.
"But in the process, we intend to always bear in mind fiscal discipline when we issue government bonds... fiscal discipline is extremely important."
With the latest bond offering, Tokyo will have sold about 52 trillion yen in debt to finance its spending in the fiscal year through March, well above a 44 trillion yen cap set by the ousted Democratic Party of Japan, according to Dow Jones Newswires.
On Friday Tokyo said the $226.5 billion stimulus plan was aimed at creating hundreds of thousands of jobs, rebuilding areas stricken by the 2011 quake-tsunami disaster and strengthening the military.
Economists have been divided, with some saying the stimulus was the right medicine for Japan's moribund economy, while detractors said it would have a short-lived impact and leave the country saddled with more debt.
|The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement|