Japan announces further stimulus package to tackle recession

”Japan

Japan has today announced a fiscal stimulus plan of 10 trillion yen (£66 billion, $99 billion) in an attempt to drag the country out of recession.

The export-dependent economy, which was once seen as relatively unscathed by the global financial crisis, is being hit by a slump in demand for its products overseas.

Many economists believe the economy is heading for the deepest recession since the World War II after it recently suffered its worst ever decline in 35 years.

Furthermore, last week, the statistics bureau in Tokyo announced that the unemployment rate has risen to a 3-year high of 4.4%, up from 4.1% in January.

In the meantime, it was announced last week that business confidence among major manufacturers in the world’s second largest economy, has plummeted to a 35-year low.

Car production is also down, while household spending is down by 3.5% in February compared to the previous year - this was the 12th monthly decline. Purchases by consumers make up for more than 50% of the economy.

Returning to the stimulus package, it is expected to boost struggling companies and support regional economies.

Furthermore, the cash will provide a safety net for the many thousands of temporary workers who have lost their jobs due to cutbacks. The funding will also be used to support nursing and medical services.

Today’s package is the third such stimulus since last October, introduced to boost the Japanese economy and fight off a prolonged recession.

Japan’s Finance Minister, Kaoru Yosano, said details of the new plan will be finalised by the end of the week.

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