© Reuters. FILE PHOTO: An employee of Cosmo Energy Holdings’ Cosmo Oil service station checks its nozzles at a branch in Tokyo, Japan, December 16, 2015. REUTERS / Yuya Shino
By Kantaro Komiya and Tetsushi Kajimoto
TOKYO (Reuters) – Japan’s ruling coalition has agreed an extra budget to support low-income households and small businesses, signaling another round of spending for the heavily indebted nation. as the country faces inflationary pressures for the first time in decades.
Prime Minister Fumio Kishida’s government aims to introduce relief measures as early as Friday, including a one-time payment of 50,000 yen ($390) in cash to low-income households with children and opening a home. extending subsidies to fuel wholesalers, a preliminary document seen by Reuters on Thursday showed.
According to the draft, the governing coalition, which faces upper house elections on July 10 as the economy grows and voters struggle to cope with rising energy costs, also aims to ensure ensure a stable supply of oil and basic food.
The news of the additional budget, which Kyodo news agency estimated at 2.5 trillion yen ($19.5 billion), came as a surprise. Deputy Chief Cabinet Secretary Seiji Kihara said its details are still being worked on.
Earlier, Toshimitsu Motegi, Secretary General of the ruling Liberal Democratic Party (LDP) in Kishida, said the package would be approved during the current parliamentary session scheduled to end in June.
The LDP’s smaller ally, the Komeito party, which supports that timetable, said neither side has proposed extending the parliamentary session, secretary general Keiichi Ishii said.
The inclusion of additional stimulus could involve additional bond issuance, which would add to the industrial world’s heaviest public debt burden, with annual economic output more than doubling time.
Japan entered a prolonged period of near-zero inflation in the early 1990s, which defined how policymakers managed the country’s economy for decades.
Driven by the war in Ukraine and soaring fuel costs, inflationary pressures are now mounting. While core CPI remained low, at just 0.6% year-on-year in February, energy costs rose 20.5% and wholesale inflation hit 9.5% in March.
(1 dollar = 128,1500 yen)
