Extra budget said unlikely at Diet

Kyodo

The Noda administration is considering deferring a plan to submit a supplementary budget during the extraordinary Diet session expected to convene this fall, several political sources said.

The administration is leaning toward placing priority on securing passage of a bill to allow it to finance the regular budget for fiscal 2012 through deficit-covering bonds, the sources said Wednesday. The Finance Ministry has warned that the government will run out of money for administrative services at the end of November unless the legislation is enacted.

The discussions on postponing the supplementary budget for the year through March come as the Liberal Democratic Party, the main opposition force, and its ally, New Komeito, are urging Prime Minister Yoshihiko Noda to dissolve the Lower House for a general election, making the Democratic Party of Japan-led administration reluctant to convene an extraordinary Diet session.

A senior administration official said there are no pressing measures requiring funds from a supplementary budget.

“Even if an extra budget is compiled, it would be difficult to start discussions on it if the LDP and New Komeito are opposed,” another administration source said.

Late last month, Noda expressed his readiness to compile a supplementary budget for the current fiscal year to stimulate the economy, which has recently showed signs of stalling.

The administration could face criticism for not doing enough if it decides not to come up with a new spending package.

Contraction feared

jiji

Economists believe the economy shrank at an annualized rate of 0.31 percent in July-September from the previous quarter, according to a monthly survey.

The average figure, worked out from estimates by 40 private-sector economists, represented a downward revision from the previous survey in September, when a 0.47 percent rise in price-adjusted gross domestic product was projected.