Japan to roll out huge stimulus plan as pandemic pain deepens

Japanese leader Shinzo Abe says the stimulus plan to counter coronavirus will exceed the $525 billion package compiled after the 2008 global financial crisis. (AP)
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Updated 04 April 2020

Japan to roll out huge stimulus plan as pandemic pain deepens

  • The government is set to approve a supplementary budget on Tuesday to fund the package

TOKYO: Japanese Prime Minister Shinzo Abe said on Friday a stimulus package to combat the coronavirus pandemic will be rolled out next week, and target small firms and households hardest hit by social distancing policies that are affecting consumption.

The package will include spending on medical supplies, as well as cash payouts to small firms and households facing sharp falls in income, Abe said.

The government will also urge private financial institutions to join government-affiliated lenders in offering zero-interest rate loans to cash-strapped small and midsized firms, he said.

“We’ll compile the package next week,” Abe told Parliament.

“We’ll deliver in a short period of time a targeted, bold package” that will help the economy achieve a V-shaped recovery, he said.

A senior ruling party official said on Friday he has agreed with Abe to offer 300,000 yen ($2,800) in cash payments per household that suffers a certain degree of income falls from the pandemic.

The government is set to approve a supplementary budget on Tuesday to fund the package.

Supply chain disruptions, travel bans and social distancing policies triggered by the pandemic have hit Japan’s economy, which was already on the brink of recession.

Economy Minister Yasutoshi Nishimura said the government’s stimulus measures will be delivered in two stages.

The first package will focus on immediate steps to ease corporate funding strains and protect jobs. The second batch will focus on boosting demand, particularly for industries currently hit by social distancing policies such as tourism and event organizers, he told a news conference.

Abe has pledged to lay out a huge stimulus plan to combat the virus that will exceed the 57-trillion-yen ($525 billion) package compiled after the collapse of Lehman Brothers in 2008.

Sources said Japan will fund the package by boosting government bond issuance by $149 billion, adding to what is already the industrial world’s heaviest debt burden at more than twice the size of Japan’s $5 trillion economy.

Rating agency S&P affirmed Japan’s sovereign debt credit rating and kept the outlook positive on Friday, despite the government’s plan to boost spending to battle the economic fallout from the virus.

Analysts expect Japan’s economy, which shrank in the final quarter of last year, to suffer two more quarters of contraction as the pain from the pandemic deepens.

Hiroshi Ugai, chief economist at JPMorgan Securities Japan, expects the world’s third-largest economy to contract 3.1 percent this year. “The government’s planned economic stimulus package would help address immediate problems that could lead to declines in household and corporate income,” he said. “But it would not be enough to change the big picture for Japan’s economy.”


Conflict-hit Libya to restart oil operations but with low output

Updated 10 July 2020

Conflict-hit Libya to restart oil operations but with low output

  • There is significant damage to the reservoirs and infrastructure
  • A first cargo of 650,000 barrels will be shipped by the Kriti Bastion Aframax tanker

TUNIS: Libya’s National Oil Corporation (NOC) lifted force majeure on all oil exports on Friday as a first tanker loaded at Es Sider after a half-year blockade by eastern forces, but said technical problems caused by the shutdown would keep output low.
“The increase in production will take a long time due to the significant damage to reservoirs and infrastructure caused by the illegal blockade imposed on January 17,” NOC said in a statement.
A first cargo of 650,000 barrels will be shipped by the Kriti Bastion Aframax tanker, chartered by Vitol, which two sources at Es Sider port said had docked and started loading on Friday morning.
The blockade, which was imposed by forces in eastern Libya loyal to Khalifa Haftar’s Libyan National Army (LNA), has cost the country $6.5 billion in lost export revenue, NOC said.
“Our infrastructure has suffered lasting damage, and our focus now must be on maintenance and securing a budget for the work to be done,” NOC chairman Mustafa Sanalla said in the statement.
Control over Libya’s oil infrastructure, the richest prize for competing forces in the country, and access to revenues, has become an ever-more significant factor in the civil war.
The internationally recognized Government of National Accord, supported by Turkey, has recently pushed back the LNA, backed by the United Arab Emirates, Russia and Egypt, from the environs of Tripoli and pushed toward Sirte, near the main oil terminals.

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