TOKYO: Japan’s promised economic stimulus must be big enough to exceed the economy’s output gap of about 15 trillion yen (US$100 billion), a senior ruling party official said on Sunday (Oct 23).
“The gap in Japan’s gross domestic product (GDP) is now around 15 trillion yen. It’s not enough to just fill this gap,” said Yoshitaka Shindo, executive acting chairperson of the ruling Liberal Democratic Party’s (LDP) policy research council.
“Both quality and size is important,” Shindo said of the package, being crafted by Prime Minister Fumio Kishida’s administration to cushion the blow from rising fuel and raw material prices.
The LDP handed its proposal to Kishida, the party leader, last week, Shindo told a programme on public broadcaster NHK.
The remarks add to growing calls among ruling party officials for hefty spending to ease the strain from rising inflation on households.
On monetary policy, Shindo said while the Bank of Japan must eventually exit ultra-easy policy, doing so now would be premature as Japan’s economy and wage growth remain weak.