Japanese companies back Kishida’s plan for big fiscal stimulus

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  • PM orders stimulus spending of “tens of trillions of yen”
  • Most firms want an additional budget of at least 10 trillion yen
  • Majority preparations for China’s slowdown, less visible crisis
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TOKYO, Oct 14 (Businesshala) – Japanese companies want the government to set up an additional budget of $90 billion or more to ease the pain caused by COVID-19, a Businesshala poll showed, according to new Prime Minister Fumio. Indicates support for Kishida’s additional encouragement. plans.

The results of the monthly corporate survey come as Kishida, who took over as premier from Yoshihide Suga last week, ordered his cabinet to compile an economic package that will help households and businesses hit hard by the pandemic. used to do.

Kishida has promised to prepare economic measures worth “tens of trillions of yen” to revive the world’s third-largest economy, already burdened by the industrial world’s heaviest debt. Japan’s debt is more than twice the size of its annual economic output.

“All we need is proactive fiscal spending that will offset the negative effects of the pandemic,” a retailer’s manager wrote in the survey on condition of anonymity. Some retailers and face-to-face service-sector firms were hardest hit by the pandemic.

In a written response, some other managers cautioned about the ghost of politically motivated spending as elections neared 31 October, while others expressed doubts about the stimulus’s effects in boosting the economy.

“We agree on the need for measures to revive the COVID-hit economy, but we don’t want to spend pork-barrels,” wrote the manager of a chemical firm.

The corporate survey showed that 87% of firms urged a larger additional budget to fund the stimulus, with 40% seeking an outlay of 10 trillion–20 trillion yen and 23% asking for 20 trillion–30 trillion yen. Or asked for more.

In the survey, COVID countermeasures topped the list of spending items, half chosen by firms, followed by 15% seeking support for restaurants and tourism, 12% calling for environmental steps and 10% seeking digital transformation Of.

“Industries facing hardship must be salvaged, but this does not simply mean extending life”, wrote the manager of a transportation equipment manufacturer. “We seek proactive spending in areas necessary to maintain Japan’s competitive edge.”

The companies also called for measures to strengthen the supply chain for chip-making and promote the use of factory automation and artificial intelligence (AI) to encourage Japanese manufacturers to shift production back home.

September 29-October. 8 The survey promoted nearly 500 large and medium-sized Japanese non-financial corporations, of which some 267 firms responded.

On foreign economies, most Japanese firms expressed concern that a slowdown in the Chinese economy, Japan’s biggest trading partner, would affect their business, as the market is troubled by problems with Chinese firm Evergrande and real estate.

Two-thirds expect China’s economy to manage a moderate recession under state control. Some 13% said the slowdown would be temporary as officials expected stimulus to accelerate the world’s second-largest economy.

Some 10% saw the Chinese economy on a downward trend next spring, and only 11% expected the recession to turn into a financial crisis.

“It depends on how the coronavirus will be contained, but we can’t avoid the impact until inbound (Chinese tourist) demand returns,” wrote a manager of a services firm.

($1 = 112.3200 yen)

Reporting by Tetsushi Kajimoto; Editing by David Dolan and Edmund Blair

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