TOKYO (AP) — Japanese Prime Minister Shinzo Abe announced plans Wednesday for a fresh barrage of economic stimulus to help revive stalling growth.
Speaking in the southern city of Fukuoka, Abe put the scale of the extra spending at more than 28 trillion yen ($265 billion), the Kyodo News Service and other local media reported.
The proposed package is due to be approved by the Cabinet on Aug. 2, Kyodo reported. It would then be included in a supplementary budget for consideration by the parliament’s extraordinary session in September.
Chief Cabinet Secretary Yoshihide Suga told reporters in a routine briefing on Wednesday that the ruling party and its coalition partner the Komeito were still hammering out details of the plan.
Japan’s economy, the world’s third largest, has stagnated for years, and massive monetary and government stimulus have so far failed to jolt it into a sustained recovery.
Abe took office in late 2012 vowing to “bring Japan back,” and has made some progress toward his goal of higher inflation and faster growth. But the aging and shrinking of the Japanese population has discouraged companies from investing much in the home market, and wages have not risen significantly enough to drive a spending boom, despite a very tight labor market.
Shares in Tokyo jumped Wednesday after a local news network reported Abe was planning about 27 trillion yen ($254 billion) in fresh stimulus.
Among other measures, Abe will propose improved wages for childcare and elder care workers, introduction of needs-based scholarships for college students and reduced employment time required to earn pensions.
A large share of the spending will go to improving infrastructure, such as expanding ports to accommodate ultra-large ships and accelerating a decades-long high-speed maglev train project.
Campaigning for a parliamentary election held earlier this month, Abe promised fresh help for the economy, and ordered his economy minister, Nobuteru Ishihara, to draw up the package.
Earlier reports put the size of the package as low as 6 trillion yen (about $57 billion).
Economists say the Bank of Japan also will likely expand monetary stimulus at a policy meeting that begins Thursday.
“The Abe administration continues to highlight the importance of cooperation with the Bank of Japan for a fiscal stimulus package,” Alex Wijaya of CMC Markets said in a commentary.