Japan is running for cover to combat social unrest following the Covid-19 pandemic. Next week the Japanese country has decided to launch a powerful economic maneuver by introducing almost into the economy 76 billion euros. They will be used to give a cash bonus of 860 euros to all citizens and foreign residents, regardless of income.
The macroeconomic data released yesterday by the Bank of Japan prompted the central government to intervene promptly. Estimates predict that deflation will return, together with the recession, with a contraction of GDP up to -0,4% in the year that ended at the end of March and up to -5% in the current year.
The premier Shinzo Abe therefore decided to give 00 yen to everyone, expanding the total estimated value of the maneuver to 117.100 billion yen (1.007 billion euros), of which 48.400 billion yen (416 billion euros) in direct fiscal spending, local authorities included. The package includes soft loan programs and deferred taxation and will be covered with an additional bond issue of JPY 23.360 billion (€ 201 billion). Among the measures, there are subsidies of up to 2 million yen (17.215 euros) for small businesses, including individuals, and an allocation of 120 million euros to triple the national stocks of the Avigan drug, which hopefully will be effective against Covid- 19. Much of the funds needed by businesses will be raised through the issuance of limitless, very long-term state bonds with low, close to zero yields, worth around $ 186 billion.