Coronavirus puts Japan in crisis, shakes up global economy | DW News
Japanese Prime Minister Shinzo Abe said on Tuesday that his government is ready to take additional fiscal stimulus measures if necessary to protect the country’s already fragile economy from the negative consequences caused by the coronavirus epidemic..
Abe, who has been criticized for the measures he has taken to combat the crisis, has pledged to focus over the next few weeks on stopping the spread of the virus in Japan, where infections have reached nearly 1,000 and 12 have died from the disease..
The epidemic comes at a critical juncture for Japan, threatening possible negative economic growth in the second quarter, and as the country prepares to host the Summer Olympics this summer..
«We have already prepared an incentive package to prevent various risks», financed from the supplementary budget for the current fiscal year ending in March and from the budget for the next fiscal year, Abe told parliament on Tuesday.
«We will look at the impact of the coronavirus on the global and Japanese economies. If further steps are deemed necessary, we will take action without hesitation», – he added.
Abe’s announcement came the day after Bank of Japan Governor Haruhiko Kuroda made it clear that the central bank is ready to stabilize markets if necessary..
In December, the government approved record budget spending for the coming fiscal year, part of which will be used to fund a $ 122 billion budget package. to boost growth as a result of the US-China trade war and a sales tax increase on October 1.
The budget needs parliamentary approval in order to come into effect and is still being discussed in the upper house of councilors.
The Abe administration is reluctant to sign new spending lines before the budget is formally passed in parliament, fearing criticism that the existing spending plan was insufficient to support the economy..
So far, the government’s response to the epidemic has been funded with reserves that it sets aside for urgent needs..
Japan’s economy contracted significantly last December and could contract again this quarter due to a health crisis that disrupted supply chains and hit retail chains that rely on inbound tourism, analysts say..
The bulk of the confirmed coronavirus cases in Japan and half of the reported deaths are in passengers who became infected on a cruise ship «Diamond Princess» (Diamond Princess), owned by Carnival Cruises, which was quarantined off the coast near Tokyo for several days last month.
Prime Minister Shinzo Abe’s response to the incident and subsequent attempts to stem the spread of the virus have been criticized both domestically and internationally..
His decision to ask schools to close before Spring Break, which comes in late March to prevent the spread of the virus, angered parents by disrupting their childcare plans..
In response, Abe said the government would create a fund to subsidize workers who were forced to take time off work to take care of their children..
Shinzo Abe, who returned to power in 2012 and is currently the longest serving prime minister in Japanese history, has made hosting the Tokyo Olympics a top priority in his tenure. Officials have repeatedly denied that they are considering postponing or canceling the Olympic Games..