Asia Economy

Japan Cabinet approves $182 billion stimulus package

Japanese Prime Minister Shinzo Abe
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The Japanese government approved an 18.6 trillion yen ($182 billion) stimulus package on Thursday aimed at dulling the impact of an upcoming tax hike on the economy.

Japanese Prime Minister Shinzo Abe ordered the government to compile the stimulus package after deciding to raise the national sales tax earlier this year. Scheduled to take effect in April, the tax hike will lift the national sales tax to 8 percent from 5 percent currently.

At the core of the stimulus package announced on Thursday lies 5.5 trillion yen in spending measures aimed at bolstering the economy.

New bonds will not be issued to pay for the package. Instead the package will be covered by tax revenues that have exceeded initial budgetary projections due to the recovery in Japan's economy under Abenomics - a series of policies spearheaded Shinzo Abe last year to help the beleaguered economy beat deflation - as well as unspent funds from other accounts.

According to the Japanese cabinet office, the measures will add 1 percentage point to gross domestic product.