TOKYO (Reuters), – To take into consideration the $490 billion stimulus package’s effects, Japan is looking at raising its forecast of economic growth for fiscal 2022.

According to a July mid-year review, real GDP (real gross domestic product) growth was projected at 2.2% by the government for fiscal 2022. This is for the fiscal year that begins in April 2022. NHK reported that the spending package was designed to ease the suffering of households and businesses from the COVID-19 epidemic. It now forecasts a tailwind for real GDP growth of around 5.6%, NHK indicated.

Japan has been slower to recover from the pandemic-induced slump than most other nations. Japan’s policymakers have had to keep a huge fiscal and monetary support even when other advanced countries are retreating from crisis mode policies.

A hit to exports and consumption caused by pandemic curbs, global supply disruptions, and increased demand for food and fuel led to the Third Quarter contraction of the third-largest world economy. 

Japan’s massive three-year spending plans to combat the pandemic left the country with a debt load that is roughly two times its current $5 trillion economy.