Japan launches $81bn economic stimulus package

8 December 2009

The Japanese government has announced it is pumping $81 billion (7.2 trillion yen) to help boost the country's flagging economic recovery.

Despite the Japanese economy reporting growth in the last two quarters, analysts believe it may be vulnerable to another downturn if the yen remains strong, making the country's exports less competitive in foreign markets.

The stimulus package has been agreed upon by Japan's coalition government, which is made up of three different parties.

But with the country's public debt approaching 200 per cent of its gross domestic product, economists believe the money will not provide long-term security for the Japanese economy.

Yasunari Ueno, chief market economist at Mizuho Securities, said: "This may help the economy somewhat.

"But it doesn't even begin to address the more fundamental issues facing Japan, such as weaknesses in the global economy and deflation."

Last month, Japan's cabinet office warned that the country had returned to deflation for the first time since 2006.

By Gary Cooper

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development