Japan must maintain an appropriate “policy mix” by adopting strong fiscal spending to go with the Bank of Japan’s powerful monetary easing to protect the economy and jobs from the coronavirus fallout, the ruling Liberal Democratic Party said, Reuters informs.
The proposals, issued by the party’s key policy council, provide the basis for stimulus measures to be funded by a second supplementary budget draft to be compiled on May 27.
The council made no mention of the size of the second extra budget although several lawmakers called for 100 trillion yen ($929.28 billion) worth of measures.
The world’s third-largest economy after the United States and China shrank by an annualized rate of 3.4 percent in the first three months of the year, the country’s government said on Monday, The New York Times writes.
That makes it the largest economy to officially enter a recession, often defined as two consecutive quarters of negative growth, in the coronavirus era.
Other major economies around the world are set to follow, joining Japan as well as Germany and France in recession, as efforts to contain the outbreak ripple around the globe. The experiences of China, where the outbreak first emerged in December and January, suggest recovery will be long and difficult.