The fact that only around half of Japan’s coronavirus fiscal stimulus funds have actually been spent so far supports our view that government spending hasn’t propped up the economy as much as commonly assumed over the past year. But while that’s contributed to Japan’s recovery lagging that in some other advanced economies – most notably the US – it also means that the government can continue to sharply curb its borrowing without having to tighten fiscal policy much. That bolsters our expectation that the economy will recover more strongly than the consensus expects next year.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services