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Japan OKs $188B Economic Plan

November 16, 1998

TOKYO (AP) _ Japan’s Cabinet approved a record economic stimulus package worth more than $188 billion Monday in an attempt to pull the country out of its worst recession in decades.

The approval comes after the government outlined a plan last Thursday for $149 billion in new spending and tax cuts, which was immediately panned by critics as insufficient.

Apparently shaken by the criticism that the plan would not be enough to resuscitate the economy, officials began dropping hints the next day that the package would likely be bigger.

Prime Minister Keizo Obuchi sees the package as his best change to stop the economy from contracting for a third consecutive year _ a key pledge made after taking office in July.

Obuchi said the package would include more than $139 billion in spending projects and more than $49 billion in tax cuts.

With the Cabinet’s approval, the plan now heads to Parliament, where the plan is expected to be passed later this month during a special session.

Japan has come under strong international pressure to pull its economy, the world’s second largest, out of a prolonged slump and to help battered Asian economies get back on track.

Monday’s package comes on the heels of legislation passed last month by Parliament aimed at rejuvenating Japan’s banking system saddled with huge amounts of bad loans.

Update hourly