Japan Government Submits Draft Extra Economic Budget To Diet

Japan’s government has submitted a draft supplementary budget for fiscal 2024 worth 13.9 trillion yen ($92.7 billion) to parliament.

The draft budget comes as consumer spending, which constitutes more than half of the nation’s GDP, shows signs of weakening amid rising prices.

The budget aims to finance a new economic package designed to ease inflation-driven financial pressures on households, Kyodo News reported.

However, it is uncertain whether the spending plan will pass smoothly during the ongoing extraordinary Diet session, set to continue through Dec. 21. Prime Minister Shigeru Ishiba’s Liberal Democratic Party and its coalition partner, the Komeito party, lost their majority in the House of Representatives during the general election in late October.

The extra budget, part of a broader economic package totaling 39 trillion yen, includes subsidies to curb higher energy costs and cash handouts to low-income households as inflation continues to strain consumers.

The government plans to finance about half of the supplementary budget, or 6.7 trillion yen, through new bond issuances, raising concerns about Japan’s fiscal health. Japan already holds the worst fiscal standing among major advanced economies.

The draft budget comes as consumer spending, which constitutes more than half of the nation’s GDP, shows signs of weakening amid rising prices. The yen’s depreciation has exacerbated import costs for resource-poor Japan, further complicating the country’s economic outlook.