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Fiscal policy will continue to support the recovery

The supplementary budget that PM Kishida will compile by year-end will probably contain only half as much fiscal support as was provided last year. However, given that government spending will still be significantly larger than it was in 2019 even as output returns to its pre-virus level, fiscal policy will remain expansionary. We expect the economy to return to its pre-virus path next year.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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