The Diet has approved a ¥4.11 trillion supplementary budget to stimulate an economy dampened by sluggish growth amid weak consumer demand and business investment.
The second supplementary budget for the fiscal year through March was approved Tuesday by the Upper House after clearing the Lower House last week. The ruling Liberal Democratic Party and its junior coalition partner, Komeito, hold a majority in both chambers.
Most of the new money will be used to fund part of a roughly ¥28 trillion economic stimulus package approved by the Cabinet in August, including infrastructure investment and enhanced welfare services.
The government aims to spark growth led by private-sector demand at a time when prospects for the global economy are uncertain due to a slowdown in China and other emerging economies.
The extra budget is also aimed at preparing for possible adverse effects stemming from Britain’s vote in June to leave the European Union.
With it, government spending for the year through March will total ¥100.01 trillion, topping the ¥100 trillion mark for the first time in three years.
The extra budget reflects Prime Minister Shinzo Abe’s efforts to lift the economy out of chronic deflation, but the government’s reliance on debt cast a shadow over its pledge to improve the nation’s fiscal health, the worst among major developed countries.
The government will issue ¥2.75 trillion of construction bonds to help pay for the newly approved spending.
Under the extra budget, some ¥710 billion will be used to enhance welfare measures such as supporting child rearing, and to distribute cash to low-income earners to bolster consumer spending.
Around ¥1.41 trillion is earmarked for infrastructure improvement to attract foreign tourists to Japan and to promote agricultural exports.
About ¥430 billion will be allocated to facilitate fundraising by small and medium-size companies, and to revitalize local economies.
Around ¥1.44 trillion is earmarked for spending to help Kyushu recover from the major earthquakes last April, and the Tohoku region ravaged by the March 2011 quake and ensuing tsunami.
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