TOKYO: Japanese companies overwhelmingly want government to budget US $ 90 billion or more to ease pain from COVID-19, Reuters poll has shown, indicating support for new prime minister’s additional stimulus packages Fumio Kishida.
The results of the monthly business survey come as Kishida, who succeeded Yoshihide Suga as prime minister last week, ordered his cabinet to compile an economic package targeting households and businesses hit hard by the crisis. pandemic.
Kishida has pledged to craft economic measures worth “tens of billions of yen” to revive the world’s third-largest economy, which is already struggling with the heaviest debt in the industrial world. Japan’s debt is more than twice its annual economic output.
“All we need is proactive tax spending that will eliminate the negative impacts of the pandemic,” a retailer official wrote in the investigation on condition of anonymity. Some retailers and businesses in the face-to-face service sector have been among the hardest hit by the pandemic.
In a written response, some other managers were cautious about the specter of politically motivated spending in the run-up to the October 31 election, while others expressed skepticism about the effects of the stimulus measures on the stimulus package. the economy.
“We agree on the need for measures to revive the economy affected by COVID, but we do not want spending on pork barrels,” wrote the director of a chemical company.
The business survey showed that 87% of businesses requested a significant additional budget to finance the stimulus, 40% requiring an expenditure of 10,000 to 20 trillion yen and 23% of 20,000 to 30 trillion yen. , see more.
In the survey, COVID countermeasures were at the top of the list of spending items, chosen by half of the companies, followed by 15% seeking support for restaurants and tourism, 12% calling for environmental measures and 10 % requiring digital transformation.
“Troubled industries must be saved, but that doesn’t just mean extending the life” of zombie companies, an official at a transportation equipment manufacturer wrote. “We want proactive spending in the areas necessary to maintain Japan’s competitive advantage.”
The companies also called for measures to strengthen supply chains for chip manufacturing and promote factory automation and the use of artificial intelligence (AI) to encourage Japanese manufacturers to shift production. to their country.
September 29-Oct. 8 surveys surveyed about 500 large and medium Japanese non-financial companies, to which some 267 companies responded.
Regarding overseas economies, a majority of Japanese companies have expressed fears that a slowdown in the Chinese economy, Japan’s largest trading partner, will affect their businesses, as market nervousness persists. about the Chinese company Evergrande and the real estate issues.
Two-thirds expect the Chinese economy to handle a moderate slowdown under state control. Some 13% said a slowdown would be temporary as authorities are expected to roll out stimulus measures to accelerate the world’s second-largest economy.
Some 10% saw the Chinese economy bottom out around next spring, and only 11% expected the slowdown to turn into a financial crisis.
“It depends on how the coronavirus is contained, but we cannot avoid the impact unless demand for inbound Chinese tourists returns,” wrote a service company official.
(1 USD = 112,3200 yen)
(Reporting by Tetsushi Kajimoto; Editing by David Dolan and Edmund Blair)