Tokyo: The Japanese government, at an extraordinary cabinet meeting Friday, adopted a comprehensive economic package mainly to tackle soaring prices resulting from Russia’s invasion of Ukraine and the yen’s rapid weakening.

Overall fiscal spending for the package, including fiscal investment and lending, as well as spending by local governments, will reach some 39 trillion yen, while total spending, including private-sector expenses, will come to around 71.6 trillion yen.

“The package will push up Japan’s real gross domestic product by 4.6 pct, while pushing down consumer prices by 1.2 pct through the next year,” Prime Minister Fumio Kishida told a press conference.

He also stressed that the package includes 6-trillion-yen measures to curb the average family’s energy bills by a total of 45,000 yen.

State funds totaling 35.6 trillion yen will be spent for the economic package. General account spending under a second supplementary state budget for fiscal 2022 to fund the package will total around 29.1 trillion yen.

The government will also earmark 500 billion yen under a special account.

The package features four main pillars. Around 12.2 trillion yen will be used for measures against rising prices and for wage hikes, while about 4.8 trillion yen will fund measures to help restore and improve the nation’s earning power by taking advantage of the recent depreciation of the yen. Some 6.7 trillion yen will be used for measures to boost moves for the “new capitalism” initiative, and around 10.6 trillion yen for measures to reinforce national resilience against disasters and respond to changes in the security environment.

The government will also secure around 4.7 trillion yen for contingency funds.

Hoping to lessen the burden of electricity bills, the government will shoulder around 20 pct of household electricity costs from January next year.

The government will also cover some of city gas charges.

On measures to support childbirth and childcare, the government will provide people with a total of 100,000 yen when they submit pregnancy and birth notifications.

The package also includes measures to promote investment in people, such as the strengthening of digital-related education and training.

The government had initially planned the second supplementary budget to be around 25 trillion yen.

Following the ruling parties’ calls for a bigger budget, Kishida, who is also president of the ruling Liberal Democratic Party, instructed Finance Minister Shunichi Suzuki to draw up a larger plan.

Speaking at a meeting between the government and the ruling camp earlier on Friday, Kishida said, “We were able to compile powerful measures (under the economic package).”

“We will overcome the soaring prices and the downside risks of the global economy, in order to revitalize the Japanese economy,” he added.

He indicated that he will push for submission of the draft supplementary budget to parliament as soon as possible, as well as for its early enactment.

Natsuo Yamaguchi, head of Komeito, the LDP’s junior coalition partner, praised the size of the supplementary budget, saying, “It will be very effective in closing the deflationary gap.”

JIJI Press