Japan plans record 60 trillion yen stimulus as virus spreads

Bloomberg reports that Japan's ruling party proposed the country's biggest-ever stimulus package worth 60 trillion yen ($554 billion) as the spreading coronavirus locks the economy in a recession.

The sum includes 20 trillion yen in fiscal measures with private initiatives and other elements likely making up the rest, according to the proposal by the Liberal Democratic Party on Tuesday. More than 10 trillion yen, or the equivalent of a 5 percentage point cut in the sales tax rate, would be handed out to the public in a combination of cash, subsidies and coupons, according to the plan.

The proposal puts an initial figure on a stimulus package that Prime Minister Shinzo Abe promised on Saturday would be bigger than the economic support offered in the wake of the global financial crisis. The plan didn't include details of how the package would be funded, though the scale of fiscal measures suggests a sharp increase in the budget deficit would be likely.

More economic measures would be considered if needed, according to the plan. Past experience shows that one package is unlikely to be enough, with as many as five sets of measures unleashed between August 2008 and December 2009 as Japan battled the fallout of the financial crisis.

The latest package would be equivalent to more than 10% of the nation's gross domestic product and calls for corporate funding measures worth more than 40 trillion yen, according to the plan. It also says the party tax panel will consider tax payment deferrals and cuts.