TOKYO (Dispatches) —
Japan’s government approved a $490 billion package to support recovery from the Covid-19 pandemic after recent economic struggles, including cash payments to most families and some smaller companies.
The size of the package was nearly double what analysts were expecting earlier this month and amounts to about one-tenth of Japan’s gross domestic product.
The stimulus package, Japan’s largest to date, accounts for about 10 percent of the country’s economic output, officials said. Prime Minister Fumio Kishida said on Friday that it could increase economic output about 5.6 percent.
“I want to bring Japan’s economy, which has been severely damaged, onto a trajectory of recovery,” he told reporters.
The package includes aid to struggling businesses and hospitals, money for strengthening semiconductor supply chains, and programs to encourage domestic tourism and investment in a nationwide university endowment fund.
It also includes a one-time cash handout of 100,000 yen, or $878, per child under 18 for households where the highest-earning parent is paid less than about $84,300 a year. About nine in 10 households with children are eligible.
The cash handouts to young families are not especially popular. Critics have questioned the need for them in a country with an aging society.
Last spring, the government sent stimulus checks to every resident, but they did little to raise inflation or consumer spending. Analysts estimate that about 70 percent of the handouts went to household savings.
Mr. Kishida’s cabinet approved the stimulus package on Friday, less than two months after he won a runoff election for leadership of the country’s governing Liberal Democratic Party. Japan’s economy is the world’s third largest after those of the United States and China.