Japan has unveiled a second package of measures worth about $ 6.3 billion in expenses to cope with the fallout of the coronavirus epidemic, focusing on supporting small and medium-sized enterprises, regarding the risks to the fragile economy .
The package, for a total of 430.8 billion yen of expenditure, shows the pressure exerted by politicians to support fragile growth and contain the risk of corporate bankruptcies, as event cancellations and a collapse of tourism threaten to hit hard l economy in general.
To help finance the package, the government would draw on the rest of this fiscal year’s budgetary reserve of around 270 billion yen, Prime Minister Shinzo Abe said Tuesday.
The move is likely to affect what the Bank of Japan decides on the policy review of March 18-19.
The central bank will aim to ensure that companies affected by the virus outbreak do not face a financial squeeze before the end of the fiscal year in March, Reuters reported.
Finance Minister Taro Aso said that a larger budget is not yet needed, adding that the fallout from the epidemic has so far not reached the scale of the 2009 financial crisis.
“We need to ascertain the current situation,” Aso told reporters after a cabinet meeting, adding “it can’t be said” if the government needed an extra budget.
In addition to business support, the new package will fund improvements to medical facilities and provide subsidies to working parents who need to take vacation due to closed schools.
Aso said that the funding will focus on small and small businesses that need funding in the next two to three weeks.
The financial watchdog urged credit associations and regional banks to hold hearings with small businesses about their financial situation, he said.
Japan would increase its special funding for small and medium-sized businesses affected by the virus to 1.6 trillion yen, compared to about 500 billion yen previously announced, Abe said.
Reuters first reported the size of the second package on Tuesday and funding on Monday.
As part of the second package, Abe claimed that a government-affiliated lender would offer funds effectively without interest and without guarantees for small businesses whose sales collapsed at the outbreak.
The virus has infected over 111,000 people and killed over 3800 worldwide, resulting in an economic disruption that has undermined the Japanese export-led economy.