Japan’s stimulus package spending to hit record $488 billion – Nikkei

© Reuters. Light is cast on a Japanese 10,000 yen note as it’s reflected in a plastic board in Tokyo, in this February 28, 2013 picture illustration. REUTERS/Shohei Miyano/File Photo

By Leika Kihara and Tetsushi Kajimoto

TOKYO (Reuters) -Japan’s fresh stimulus package will include record spending of around $488 billion due to huge amounts of cash payouts to cushion the economic blow from the COVID-19 pandemic, the Nikkei newspaper reported on Thursday.

The government will likely issue fresh debt to finance part of the 55.7 trillion yen ($488 billion) in spending, which would exceed two big packages compiled last year, the paper said without citing sources.

The total package, which includes funds that do not lead to immediate spending, will likely reach 78.9 trillion yen, the Nikkei said.

Government and ruling party officials are finalising details of the package, which will be compiled and announced on Friday.

“Payouts and subsidies ought to be delivered as quickly as possible,” a government source told Reuters, adding the boost to economic growth from the package will likely start to appear in the January-March quarter.

LDP Secretary-General Toshimitsu Motegi also said on Thursday an extra budget of more than 30 trillion yen would send a “big message” to markets, according to Kyodo news agency.

Japan’s economy contracted much faster than expected in the third quarter as global supply disruptions and coronavirus pandemic curbs hurt exports and consumption.

($1 = 114.0600 yen)