Tokyo, Reuters says: Japan’s ruling coalition has agreed to a new budget that will help low-income families and small businesses. This shows that the country, which is heavily in debt, is going to spend more money as it fights inflation for the first time in decades.
Prime Minister Fumio Kishida’s government plans to set out relief measures as soon as Friday, including one-time cash payouts of 50,000 yen ($390) to low-income families with children and more subsidies for fuel wholesalers, a preliminary document seen by Reuters on Thursday said.
According to the draught, the governing coalition, which is facing upper house elections on July 10, wants to keep oil and basic food prices stable. The economy is faltering and people are struggling to pay high energy prices.
The Kyodo news agency thought the extra money was worth about $19.5 billion. It was a surprise to hear about it. He said that the details were still being worked out.
If it isn’t approved by the end of this parliament session in June, it should be, said Toshimitsu Motegi, secretary-general of Kishida’s Liberal Democratic Party (LDP).
The Komeito party, which backed the LDP’s timetable, said neither party had asked to extend the parliamentary session, its secretary-general, Keiichi Ishii, said.
Covering the extra stimulus might require more bond issues, which would add to the industrial world’s heaviest public debt burden, which is more than twice the country’s GDP.
For years, Japan went through a long period of low inflation that shaped how policymakers ran the country’s economy.
Inflation is rising because of the war in Ukraine and rising fuel prices. The core CPI was only up 0.6 percent from the previous year in February.Energy prices increased by 20.5 percent in March, while wholesale prices increased by 9.5 percent.
(One dollar is worth 128,500 yen)