Japan passes new economic stimulus package

The Japanese government has approved a large-scale economic stimulus package worth about 21,300 billion Yen (about more than 135 billion USD).

This is the largest economic stimulus package Tokyo has launched since the COVID-19 pandemic. The new economic stimulus package comes as Prime Minister Sanae Takaichi seeks to boost growth through expanded fiscal spending, the economic stimulus package includes 17.7 trillion yen in public spending and 2.7 trillion yen in tax cuts.

The stimulus package will also allocate 500 billion yen for subsidies on electricity and gas bills in the first three months of 2026, helping to reduce energy costs that households are paying.

In addition to short-term support measures to ease the impact of inflation, Tokyo also plans to increase investment in areas such as shipbuilding and artificial intelligence, seen as essential for crisis management and national security.

Other specific measures in the package include: cash subsidies of 20,000 yen per child, with a total amount of about 400 billion yen from the central budget; distribution of rice coupons or gift certificates worth 3,000 yen per person (issued by local governments); addressing the impact of the temporary abolition of the gasoline tax and raising the non-taxable income threshold to reduce the financial burden on households.

With food prices remaining high, the central government will allocate 2 trillion yen to support local governments in implementing their own measures to reduce living costs.

Source: VTV