Japan has approved a 13.5trn yen ($130bn) fiscal stimulus package as Prime Minister Shinzo Abe employs his “second arrow” to revive the country’s economy amid concerns monetary easing is reaching its limits.
Including public private partnerships the total package reaches 28.1trn yen, according to CNBC.
Analysts expect the package to boost the economy 0.4 percentage points this year, but only 0.04 percentage points in 2017.
The package includes infrastructure spending and cash payouts to low-income earners.
A cabinet reshuffle on Wednesday could also underscore Abe’s commitment to fiscal policy with many expecting him to appoint Toshihiro Nikai as his deputy. Toshihiro is an advocate of big public works spending.
So-called Abenomics is based on “three arrows” of monetary easing, fiscal stimulus, and structural reforms.