Japan to double direct spending in stimulus package: Nikkei

[TOKYO] Japan's government is likely to inject 6 trillion yen (S$77.8 billion) in direct fiscal outlays into the economy over the next few years under a planned stimulus package, double the amount initially planned, the Nikkei newspaper reported on Tuesday.

The Finance Ministry had initially earmarked 3 trillion yen for direct spending from national and local governments under its draft fiscal stimulus plan. But the amount was doubled on requests for bigger spending by government officials and ruling party lawmakers, the Nikkei said without citing sources.

The size of spending could increase further as the government presents the draft stimulus plan for negotiations with ruling party lawmakers from Tuesday, the paper said.

The direct spending would be part of a massive stimulus package to bolster the economy, which would also consist of state subsidies to private companies and lending programmes from quasi-government financial institutions.

The total size of the package, which could be announced as soon as Aug 2, could exceed 20 trillion yen, the Nikkei said.

To fund part of the package, the government will compile a supplementary budget for the current fiscal year of around 2 trillion yen, the paper said. The rest will be funded in the budget for the next fiscal year beginning in April 2017, it said.

REUTERS