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stimulus package

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Senate leaders and the White House have agreed on a stimulus package worth more than $1.8 trillion to ease the impact of coronavirus.

The stimulus reportedly includes payments of $1,200 to most American adults and aid to help small businesses pay workers.

Full details of the deal, which Congress is expected to pass, are not known.

Financial markets around the world rose on news of the deal.

President Donald Trump has said he hopes the US will shake off coronavirus within less than three weeks.

However, the top US infectious disease expert, Anthony Fauci, warned that “you have to be very flexible” about a timeframe for ending the crisis.

Meanwhile, New York Governor Andrew Cuomo warned the illness was spreading faster than “a bullet train” in his state, which is at the centre of the pandemic in the US.

After 802 deaths and 55,225 confirmed infections, the US is more than midway through a 15-day attempt to slow the spread of the virus through social distancing.

Around 19,000 people have died with coronavirus across the planet since it emerged in China’s Wuhan province in January, and more than 425,000 infections have been confirmed.

Southern Europe is now at the centre of the pandemic, with Italy and Spain recording hundreds of new deaths every day.

Governments around the world have responded by locking down societies in the hope of slowing the spread of the virus.

The stimulus agreement announced by Democratic and Republican senator leaders at 01:30EDT on March 25 includes tax rebates, loans, money for hospitals and rescue packages.

According to media, individuals who earn $75,000 or less would get direct payments of $1,200 each, with married couples earning up to $150,000 receiving $2,400 and an additional $500 per each child.

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Senate Majority Leader Mitch McConnell described the package as a “wartime level of investment” in the US nation.

If passed, it would be the largest government economic stimulus in US history.

The agreement must still be voted through the House of Representatives and the Senate before President Trump signs it off but it enjoys cross-party support.

One factor that may delay its passage is the question of how voting will be conducted, given that some members of Congress are off with coronavirus or are self-isolating having come into contact with infected people.

New York Governor Cuomo dismissed the plan as “terrible for the state” and called the proposed $3.8 billion “a drop in the bucket, as to need”.

He said New York was facing a $15 billion revenue shortfall, and estimated that $1 billion has already been spent on the coronavirus response.

The details of the stimulus bill have not yet gone to the House, making some lawmakers wary of signaling their early approval.

If any member objects to unanimous consent, lawmakers will be asked to return to Washington and vote over the course of an entire day, in order to limit how many people are present on the House floor at one time.

President Trump said he hoped America could get back to normal by Easter, which falls on April 12 this year.

He told Fox News: “We’re going to be opening relatively soon…

“I would love to have the country opened up and just rearing to go by Easter.”

However, the president later sounded more cautious, saying: “We’ll only do it if it’s good.”

President Trump added that re-opening could be limited to “sections” of the country such as “the farm belt”.

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Japan’s government has approved a fresh 10.3 trillion yen ($116 billion) stimulus package in an attempt to spur a revival in its economy.

The package will include infrastructure spending, as well as incentives for businesses to boost investment.

Tokyo estimates that the stimulus will boost Japan’s economy by 2% and create 600,000 jobs.

Japan’s economy has been hurt by a dip in exports amid slowing global demand and subdued domestic consumption.

The world’s third-largest economy is currently in a recession, having contracted for two quarters in a row.

“Unfortunately, the previous administration failed to work out how to boost growth and expand the economic pie,” Prime Minister Shinzo Abe said.

“It is vital that we have an economic strategy that can create jobs and raise incomes to sustain growth.”

Included in the spending package are plans to rebuild areas devastated by the earthquake and tsunami of 2011, support for regional economies, and more investment in education and social security.

Shinzo Abe, who took office in December, has promised to take aggressive measures to help put the economy back on a growth track.

Among those has been a pledge to take measures to weaken the yen.

Japan’s government has approved a fresh $116 bn stimulus package in an attempt to spur a revival in its economy

Japan’s government has approved a fresh $116 bn stimulus package in an attempt to spur a revival in its economy

A weaker Japanese currency bodes well for the country’s exporters as it makes their goods less expensive to foreign buyers and also helps boost their profits when they repatriate their foreign earnings back home.

The yen has weakened nearly 12% against the US dollar since November last year on hopes of such moves. It was trading close to 88.97 yen against the US dollar in Asian trade on Friday.

The government said that it would continue to keep a watch on the currency’s movements and “respond as appropriate”.

Japanese shares rose on the news of the stimulus with the Nikkei 225 index gaining 1.4%.

The Japanese government also hopes the latest stimulus spending will help to tackle deflation. Japan has been fighting deflation, or falling prices, for many years. It has been a big hurdle in policymakers’ attempts to boost domestic demand because consumers tend to put off purchases in the hope of a better deal in the future.

However, some analysts said the stimulus was only a short-term solution to Japan’s economic issues.

They said that while such an big amount of money being injected into the economy was likely to help spur growth, further steps were needed to sustain it in the long run including measures to help exporters and reforms aimed at boosting domestic consumption.

“So far what we have seen is measures to kick-start the economy,” said Martin Schulz of Fujitsu Research Institute.

“But once the stimulus boost is over, the coffers will be empty again and Japan will have no more money to spend.”

Japan’s exports have been hurt by a slowdown in demand from key markets such as the US, eurozone and China.

While sales to the US and eurozone have been hit by economic issues in those markets, those to China have been affected by a territorial dispute between the two countries.

China is Japan’s biggest trading partner and is also among the fastest growing consumer markets.

Martin Schulz said Japan needed to improve its relations with China to help its exporters’ sales in the country, not least because demand from the US and eurozone is likely to remain subdued in the near term.

On the domestic front, Japan needs to ease regulations in key sectors such as construction, healthcare, retail and agriculture to make them more attractive for investors, Martin Schulz added.

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