Japan’s cabinet is set to approve a 13.2 trillion yen ($87.5 billion) supplementary budget to help fund Prime Minister Fumio Kishida’s latest economic stimulus package, which aims to boost growth and mitigate the impact of inflation on households.
The extra budget will be partly financed by issuing 8.9 trillion yen in additional government bonds, according to documents obtained by Bloomberg. The remainder will be funded by a 3.4 trillion yen surplus from the previous year, 171 billion yen in tax revenue and other sources.
Still, the additional bond issuance will not impact the government’s calendar-based issuance plan for the current fiscal year, according to people familiar with the matter. That’s because FILP bonds will be reduced and adjustments will be made to front-loaded debt issuance.
The extra budget will cover Kishida’s latest economic stimulus measures worth more than 17 trillion yen. Income tax rebates and additional aid for low-income households form a key part of the package.
Of the total spending earmarked in the extra budget, 2.7 trillion yen will be allocated to price relief measures to protect households from rising prices, and 1.3 trillion yen to solidify ongoing wage increases, the documents showed.
A finance ministry official said they can’t comment on the figures as they are still under discussion until cabinet approval.
The additional budget is expected to be approved by the cabinet on Friday after which it will be submitted to parliament, where it’s likely to pass given Kishida’s ruling coalition majority.
