TOKYO: Japan’s cabinet approved a $122 billion fiscal package on Thursday to support stalling growth in the world’s third-largest economy amid offshore risks and as policymakers look to sustain activity beyond the 2020 Tokyo Olympics.

The 13.2 trillion yen ($121.50bn) package is expected to push up gross domestic product by 1.4 per cent through fiscal 2021 and comes as Japan, like other major economies, looks to revive growth through spending as central banks rapidly run out of monetary policy options.

However, Tokyo is also seeking to balance its need for stimulus with its drive to reduce its massive public debt, which is more than twice the size of its GDP and the industrial world’s largest debt pile.

“The current situation calls for all possible steps to prevent overseas risks from curbing not only exports but also capital spending and private consumption,” the government said in a statement.

“Now is the time to adopt bold fiscal policy to overcome various downside risks and secure future safety while the Bank of Japan is patiently continuing powerful monetary easing.”

Published in Dawn, December 6th, 2019