JAPANESE Prime Minister Shinzo Abe on Friday made a widely expected decision to roll out additional stimulus spending — the latest attempt by Tokyo to revitalize a sputtering economy that has failed to break out of decades of stagnation.

    Abe directed his Cabinet to compile an extra budget for the current fiscal year, which will include support for rural areas hit by the Trans-Pacific Partnership (TPP) free trade deal, and cash payouts to low-income groups to spur private consumption.

    “While aiming to achieve our goal of halving the primary budget deficit this fiscal year, we will compile measures that will lead directly to resolve problems Japan faces,” Finance Minister Taro Aso told reporters after a Cabinet meeting.

    The instruction came after the government last week unveiled two packages of steps aimed at tackling Japan’s shrinking population and easing farmers’ worries over the TPP deal.

    The extra budget will focus on these measures as well as other urgent steps such as disaster restoration and payouts to low-income households, Aso added.

    Abe’s Cabinet later in the day approved an outline of next fiscal year’s budget.

    “We will make a progress on the both aims of defeating deflation, revitalizing the economy and restoring public finances from the next fiscal year,” Abe told his top economic advisory panel.

    The government has not decided on the size of the extra budget but sources told Reuters last month that a supplementary budget worth over 3.1 trillion yen (US$25.29 billion) would be considered, without issuing extra bonds to fund the spending.

    The extra budget will be compiled next month along with an annual budget for the next fiscal year starting in April 2016.

    The additional fiscal impulse comes at a time of growing economic strains, with Japan’s relapse into recession in the third quarter and a cooling China stoking uncertainty about the outlook.(SD-Agencies)