TOKYO, Jan. 11 (UPI) -- Japanese Prime Minister Shinzo Abe's Cabinet Friday approved a package of over $116 billion to stimulate the economy, hobbled by deflation and falling exports.
The new package would bring to more than $225 billion the total stimulus funds so far. Japan is the world's third-largest economy after the United States and China.
Kyodo News reported the new package seeks to add about 2 percentage points to the gross domestic product and create at least 60,000 jobs.
Abe, whose Liberal Democratic Party was swept to power last month after a landslide victory in parliamentary elections, had campaigned on kick starting the recession-hit economy.
"We have to put an end to the shrinking economy," Abe was quoted as telling reporters, while warning it would be "important to maintain fiscal discipline."
The 10.3 trillion yen stimulus package will likely be financed through bonds as part of the Abe government's monetary easing effort.
The previous government, however, had capped issuing new debt because of Japan's already huge public debt. Japan's fiscal debt is already 220 percent of the GDP.
The stimulus will also seek to encourage private investment and finance large-scale public works projects and reconstruction in the wake of the catastrophic March 2011 earthquake and tsunami which deeply hurt the economy.
The Bank of Japan, the country's central bank, also has been urged undertake aggressive monetary easing to fight deflation and other economic ills and boost domestic demand.
The government will draw up a $145 billion additional budget for the current fiscal year through March in addition to the stimulus package.