Economic re-rebuilding worsened by the spread of Corona Virus infection August 29 at 4:59 a.m. on the challenges of the next administration
As Japan’s economy deteriorates sharply due to the spread of the new coronavirus, the challenge will be whether the next administration can take effective measures to rebuild the economy following Prime Minister Shinzo Abe’s resignation.
From April to June, gross domestic product experienced a historic decline, with real growth of minus 27.8% on an annualizedizedized rate.
The government has already organized two supplementary budgets this fiscal year, implementing measures such as the expansion of “sustained benefits,” which provide up to 2 million yen to small and medium-sized enterprises with declining sales, and “employment adjustment subsidies,” which subsidize part of the leave allowance for companies that maintain employment for employees through temporary leave.
However, private consumption is now at a standstle due to the re-expansion of infection, and there are concerns about the deterioration of employment in the future, and exports are still sluggish due to the sharp deterioration in the global economy, such as the United States and Europe, and the next administration will be challenged to come up with effective measures to rebuild the economy.
The focus will be on utilizing the 10 trillion yen reserve funded in the second supplementary budget to respond quickly according to the status of infection, and at the end of next month, the focus will be on whether to include measures with a sharpness to support companies and individuals in the fiscal year ended March Reiwa, which is the deadline for submitting approximate requests from ministries and agencies.
However, the fiscal situation has already deteriorated further, such as issuing more than 57 trillion yen of government bonds as a source of funds for the two supplementary budgets, and the next administration will be asked how to achieve both economic reconstruction and fiscal soundness.