Japan is ready to flexibly expand its economic stimulus, a spokesman told Reuters

TOKYO (Reuters) – Japan is poised to pump more money into the economy to alleviate the pain of a long-running pandemic, a senior government spokesman said on Sunday, with increasing gestures for political calls for additional stimulus to boost growth.

Two weeks before the Olympics, Tokyo will enter its fourth COVID-19 state of emergency Monday through August 22, fueling shorter hours and fears of prolonged pain in restaurants that ban alcohol consumption.

“First, we need to continue to work with citizens on anti-infection measures and vaccinations, and we need to provide support to businesses and people in need,” said Katsunobu Kato, Cabinet Secretary-General, in the NHK public broadcaster discussion program.

“Then we definitely want to take economic measures flexibly,” Kato said, not to mention the size or timing of more stimulus measures.

Lawmakers from the Liberal Democratic Party of Prime Minister Yoshihide Suga have stepped up demands for a new relief package, saying the heavyweight Toshihiro Nikai party needs an extra budget of about 30 trillion yen ($ 270 billion).

The world’s third-largest economy is expected to recover from a 3.9% year-on-year contraction in the first quarter, but analysts expect a recovery to be gradual, with consumption in the service sector particularly weak.

Government spending Japan’s annual economic output is multiplied by 2.5 times public debt, which is the world’s heaviest debt in the industry, inflated by massive stimulus packages in the past year.

Suga, who is due to call a general election this year, said on Thursday that the government wants to focus on areas such as corporate finance, employment and restaurants, and that it wants to deliver as soon as possible.

He said the government would respond flexibly to dealing with the coronavirus in the economy, always considering the economic package.