TOKYO – Japan is ready to pump more money into the economy to ease the pain of a protracted pandemic, the top government spokesperson said on Sunday, nodding to growing political calls for ‘an additional stimulus to support growth.

Less than two weeks before hosting the Olympics, Tokyo enters its fourth COVID-19 state of emergency from Monday to August 22, fueling fears of prolonged pain for restaurants affected by shorter hours and a consumption ban alcohol.

“First of all, we must carry out anti-infectious measures and vaccination in cooperation with citizens, and provide support to businesses and people in need,” Chief Cabinet Secretary Katsunobu Kato said in a debate program on the public channel NHK.

“Next, we want to take economic measures flexibly and without hesitation,” Kato said, without mentioning the size or timing of the new stimulus measures.

Lawmakers in Prime Minister Yoshihide Suga’s Liberal Democratic Party have stepped up calls for a new relief plan, with party heavyweight Toshihiro Nikai claiming an additional budget of around 30 trillion yen ($ 270 billion) is necessary. Read more

The world’s third-largest economy is expected to rebound from its annualized 3.9% contraction in the first quarter, but analysts expect the recovery to be gradual as consumption in the service sector is particularly weak.

Public spending is limited by public debt to 2.5 times Japan’s annual economic output – the heaviest debt burden in the industrial world, inflated by massive stimulus packages rolled out over the past year.

Suga, who is due to call a general election later this year, said on Thursday the government wanted to focus on areas such as business finance, jobs and restaurants, and wanted to deliver as soon as possible.

He said the government would respond flexibly as it tackles the coronavirus blow to the economy with an economic package still in mind.