Tokyo, 4 April, /AJMEDIA
Japan cannot avoid crafting a supplementary budget for fiscal 2022 as part of measures to mitigate the impact of rising prices on the economy, former Prime Minister Yoshihide Suga said Sunday.
“It’s very important to take action aimed at invigorating the economy,” Suga said on a Fuji TV program, without specifying when an extra budget should be formed.
His successor, Fumio Kishida, is reluctant to compile an additional budget at an early date as the new fiscal year just started this month.
While his ruling Liberal Democratic Party’s coalition partner, Komeito, has been calling for the enactment of such a budget during the ongoing 150-day ordinary parliament session, Kishida has said the government should prioritize using reserve funds in order to respond speedily to a possible economic slowdown.
The government has reserve funds totaling 5.5 trillion yen ($45 billion) in the initial budget for this fiscal year. The funds include those set aside for the COVID-19 response.
Government sources said last week that Japan is considering spending over 1 trillion yen on a new economic package in a bid to cushion the impact of rising energy and grain prices, which have become even higher since Russia’s invasion of Ukraine in February.
Kishida has said the package will be designed to help Japan’s economy recover from the coronavirus pandemic and focus on four areas — higher crude oil prices, stable food supplies, funding support for smaller firms and assistance to people in need.
He has ordered officials to make it ready by the end of April.
But Suga said Sunday tapping into the reserve funds would not be sufficient in terms of economic measures.
“A drastic response is needed,” he said, after the Bank of Japan’s Tankan survey showed Friday that business confidence among major Japanese manufacturers worsened for the first time in seven quarters in March, amid surging energy and raw material costs due to the war in Ukraine and pandemic-related supply bottlenecks.
