provisional translation

Emergency Economic Measures to Cope with COVID-19
Cabinet Decision on April 7, 2020, Amended on April 20, 2020

(Summary)

April 2020
Cabinet Office1

Emergency Economic Measures to cope with the Novel Coronavirus (COVID-19)～Thoroughly secure people’s lives and move toward economic revitalization～

Current Conjuncture of the Economy and Basic Concepts of the Economic Measures
1. Domestic and overseas economies have been hit ruinously••The global economy is facing the worst crisis ever in the post WWⅡ era. The Japanese economy is in severesituation, extremely depressed by the impacts of COVID-19.
Severe situation is expected to continue. Full attention should be paid to further downside risks to thedomestic and overseas economies.

2. The Government has decided to formulate a new emergency economic measures••

With the declaration of a state of emergency, the Govt compiled a new economic measures with huge fiscal
size, employing all policy tools including fiscal, tax and regulatory measures, in an unprecedented manner.
The Govt will swiftly implement those measures, on top of “Comprehensive Economic Measures to Create aFuture with Security and Growth” (Cabinet Decision on Dec.5, 2019),

3. Two phases are set, considering time frame for strategic implementation of various measures•••

The first phase, “Emergency Support Phase”, is the period until the end of the contagion in sight.
The second phase, “V-shaped Recovery Phase”, refers to the period aiming at achieving strong recovery after
the end of contagion by stimulating demands and advancing social structural changes.
The Government strategically puts each measure into practice along with the two phases in order to returns theJapanese economy to a solid growth trajectory.

4. The Government will take any additional action as needed•

The Government will take timely and decisive actions as needed, with closely monitoring the development of
COVID-19 and its impact on the economies and daily life.
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Emergency Support Phase
While containing the development of COVID-19, the Government thoroughly secures employments,
businesses and daily lives, to maintain solid bases for economic recovery after the end of contagion.
I. Measures to prevent the spread of the infection, build medical treatment structures, and develop
pharmaceuticals
1. Secure supply of masks and disinfectants
2. Enhance testing system and achieve early detection of the infection; e.g. doubling the PCR capacity to 20K/day
3. Strengthen medical care supply systems (concentrating on patients with severe symptoms); e.g. increase beds from 28K to 50K, secure 15K ventilators, enable remote medical examination at the first visit tentatively
4. Accelerate the development of therapeutic medication and vaccines; e.g. prepare the stockpile of Avigan to 2M doses
5. Increase capacity to cope with Japanese people returning from abroad (quarantine, etc.)
6. Strengthen public relations
7. International cooperation such as contributions to emergency assistance for infected countries
8. Support families with children amid tentative closure of schools

II. Protecting employment and keeping business viable
1. Secure employment; e.g. enhance the subsidy for leave allowance in case of avoiding dismissals, etc.
2. Financial measures (aka cash management support); e.g. effective zero interest loan without collateral through government
affiliated financial institutions, as well as private financial institutes (making use of the loan scheme of prefectures)
3. Support enterprises (esp. SMEs) facing difficulties in keeping business; e.g. new cash payment to SMEs and sole proprietors (incl.
freelancer) with turnover decreasing more than 50%.
4. Support individuals facing difficulties in daily lives; e.g. new cash payment of 100K yen to all residents in Japan, additionalchild allowance of 10K yen per child5. Tax measures; e.g. large scale deferment of tax and social security contribution, reduction or exemption of local property tax forSMEs’ fixed assets
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Emergency Support for Households

Emergency Support for SMEs, etc.

 New Cash Payment to all residents in Japan
 Cash payment to all residents for the purpose offostering national solidarity against COVID-19
 Amounting to Approx. 12.9 trillion yen
 100K yen per person, tax exempt
 Application form sent by mail. Online application isapplicable in case of MyNumber Card holder
 Additional child allowance of 10k per child On top of (regular) monthly 10K per child allowance,tax exempt Emergency microcredit to troubled households
 Max 200K loan (no interest) to whose who need
temporary money, and additional loan (no interest) of
450K-600K for 3 months to those who rebuild theirlives. Loans are forgivable in certain cases.
 Enhance rent support for low income households toinclude those who are about to lose their dwelling due
to decrease in revenue below certain thresholds.
 Reduction or exemption of social security
contribution (healthcare, long-term care insurance)
 Deferment of utility charges (request) New Cash Payment to SMEs and Sole proprietors,etc.
 Approx. 2.3 trillion yen. Cash payment to a varietyof businesses (incl. NPO, healthcare corporations,etc.), which can be used in broad area.
 2M yen to corporations and 1M yen to sole
proprietors, whose revenue falls by more than 50%
in any month of 2020 from previous year.
 Financial Measures (support for cash management) No interest no collateral loan (w/ principal
amortization deferred up to 5 years) through private
financial institutions, besides government affiliatedfinancial institutions (e.g. JFC).
 Refinancing of outstanding loans to no interest loan.
 Tax Measures
 Enhance Tax and SS contributions deferment forbusiness with rev falling by more than 20%, etc.
 Reduction or exemption of local property tax on
machinery and building for affected SMEs, etc.
 Request to landlords to consider rent deferment, etc.
depending on tenant’s situation, while requestingbanks to reschedule the landlord’s debt, etc.

 Enhancement of the subsidy for leave allowance (“employment adjustment subsidy”)
 From April to June, subsidy rates are raised from 2/3 to 9/10 for SMEs and 1/2 to 3/4 for large enterprises (oncondition of avoiding dismissals). Coverage enlarged to include non-regular workers (less than 20 hrs per week).
4V-shaped Recovery Phase
The phase to achieve strong recovery by stimulating consumptions in affected sectors, as well asinvestments for future such as digitalization and deployment of remote technologies
III. Recovery of economic activities through public and private cooperation as the next phase
1. Support affected sectors, such as tourism and transportation, food service, event and entertainment business; e.g. providing
incentives to consumption expenditure on related areas in form of price discount, voucher or point reward, etc.
2. Revitalize regional economy; e.g. supporting agriculture, forest and fisheries, revitalizing inbound tourism through strategic
promotions, etc. and supporting recommencement of sports and art events

IV. Making economic structure more resilient
1. Enhance resilience of supply chain; e.g. subsidy for relocating production sites of those goods depending on a specificcountry and/or important for healthy daily lives (either domestically or through diversifying among ASEAN region, etc.)
2. Facilitate overseas businesses, and strengthen export and domestic production capacities of agriculture, forestry andfisheries products and foods ; e.g. supporting overseas business of Japanese enterprises in Asian economies throughlending by JBIC and emergency yen loan to developing countries by JICA.

3. Accelerate digital transformation by deploying remote technologies; e.g. promoting telework among SMEs, accelerating
dissemination of PC/tablet to every pupil in compulsory education, and tentative removal of regulation to promote online
education.
4. Front-load public investment; swiftly implement public works included in FY2019 supplementary and FY2020 initial budget

V. Preparing for the future
Create new contingency reserve funds for COVID-19 (amounting to 1.5 trillion yen)
On top of the above, the Government establishes “Special Allocation for Regional Revitalization to cope with COVID-19”,
enabling local governments to implement detailed and necessary measures, corresponding to all measures listed in the Package.

5Size of Measures(Approx., trillion yen)Comprehensive
Economic Measures1

Emergency ResponsePackage (1st and 2nd)2Newly addedmeasures

TotalFiscal Expenses

9.8 out of 13.2

0.5

38.1

48.4

Total size

19.8 out of 26

2.1

95.2

117.1
Approx. 21% of GDP(Note)
1. A part of measures listed in “Comprehensive Economic Measures to Create a Future with Security and Growth” (Cabinet Decision on Dec. 5, 2019),
with its impacts expected to take effects from April.
2. Measures listed in “The First Novel Coronavirus Disease Emergency Response Package” (decided by the Meeting of the Novel Coronavirus Response
Headquarters on Feb. 13, 2020), and “The Second Novel Coronavirus Disease Emergency Response Package” (decided by the Meeting of the Novel
Coronavirus Response Headquarters on Mar.10, 2020)

Fiscal Expenses of 38.1 trillion yen on newly added measures 27.5 trillion yen: FY2020 supplementary budgetof which 25.6 from general account (financed by additional issuance of JGB)First pillar：1.8 tri (special allocation to local governments, etc.)
Second pillar: 19.5 tri (cash payments to enterprises and individuals, capital injection to JFC, etc.)
Third pillar: 1.8 tri (incentive for consumption expenditure on tourism, etc.)
Fourth pillar: 0.9 tri (subsidy for supply chain resilience, dissemination of PCs to pupils, etc.)
Fifth pillar: 1.5 tri (new contingency reserve fund) 0.5 trillion yen: Expenses by local governments and Tax measures (e.g. local property tax), etc.
 10.1 trillion yen: Addition of FILP to FY2020 plan (mostly dedicated to the second pillar)
Total size of 95.2 trillion yen includes (i) tax and SS contribution deferment of 26 trillion yen, (ii) nearly
45 trillion yen of financial measures (e.g. credit line), (iii) other fiscal expenses (e.g. cash payments
6amounting to 15.2 trillion yen) and private sector expenses.

Economic Impact Estimated by the Cabinet Office
I. Measures that support and boost GDP
Impact of measures that directly affect GDP (sum of the remaining impact of the December 2019 policy
package and the impact of new measures) is estimated to be approximately 4.4% of real GDP.
Approximately 4.4% of real GDP

Approximately 3.3%
Development of resilient
economic structure
Stimulating consumptionqProtection of employment and supportfor households

Approximately 1.1%
Development of resilient
economic structureStimulating consumption

Remaining impact of the December 2019 package

Development of preventive
measures against infection

Impact of new measures

II. Measures that protect employment and support businesses
Financial support measures mainly for SMEs (loans and credit guarantee through government financialinstitutions), tax payment deferral and other measures.
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Reference : Size of Measures (in detail)(Approx., trillion yen)

Fiscal Expenses

Central andlocal governments’Expenses

Total Size

FILP loans

I. Measures to prevent the spread of theinfections build medical treatment
structures, and develop pharmaceuticals

2.5

II. Protecting employment and keeping
business viable

30.8

III. Recovery of economic activities as anext phase through public and private
cooperation

IV. Making economic structure resilient
V. Preparing for the future(establishment of new contingency
funds)
Total

2.5
n/a
21.1

9.7

2.5
88.8

2.8

3.3

10.2

0.5
8.0
2.3

8.5

15.7

1.5

1.5
48.4

n/a
35.8*
12.5**

1.5
117.1(Note)• 25.0 trillion yen is from the central government, and 18.6 trillion (out of 25.0 trillion) yen is included in supplementary budget for FY2020 (16.7 trillion yen for
General Account and 1.9 trillion yen for Special Accounts)** 10.1 trillion (out of 12.5 trillion) yen is added in supplementary budget for FY2020.

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