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Friends and Enemies of Fiscal Stimulus Are Gathering for G-7

  • Finance ministers, central bankers meet Thursday-Saturday
  • Canada brings pro-spending message that may please its host
A police officer stands guard front of the G7 Ise-shima summit banner on May 5. The G7 summit will be held in Ise-Shima, Mie prefecture on May 26 and 27.

A police officer stands guard front of the G7 Ise-shima summit banner on May 5. The G7 summit will be held in Ise-Shima, Mie prefecture on May 26 and 27.

Photographer: Buddhika Weerasinghe/Getty Images

Japan is likely to advocate further fiscal spending to spur growth as Group of Seven finance ministers and central bankers meet in Sendai this week. It can expect a warm response from Canada, where the Trudeau government has embraced deficit spending, and a cool response from Germany, which continues to warn against the risks posed by stimulus.

With unprecedented monetary easing so far unable to pull Japan from its economic funk, pressure is building for more spending by the Abe administration, even as government debt swells. With a record 96.7 trillion yen ($885 billion) budget already in place for this fiscal year, parliament on Tuesday approved a 778 billion yen of relief funding to shore up southern regions struck by earthquakes in April, and speculation is rising that the prime minister will announce a much bigger supplementary spending package over the coming months to support the nation at large.