Japan’s government to earmark ¥1.15 trillion for infrastructure in second extra budget

Kyodo

The government plans to allocate ¥1.15 trillion in a second supplementary budget for fiscal 2018 to fund measures to strengthen infrastructure following a string of natural disasters earlier this year, a source said Sunday.

Prime Minister Shinzo Abe said last month that his government will concentrate over the next three years on measures to bolster infrastructure such as river dikes, airports and school buildings to mitigate the impact of natural disasters.

The size of the second supplementary budget could total roughly ¥2 trillion, as it will also cover steps to strengthen the farm sector as competition is expected to intensify with imported agricultural products after an 11-nation trade pact called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership takes effect in late December.

The extra budget is also intended to shore up Japan’s economy following a contraction in the July-September quarter and soften the impact of an expected drop in demand after the consumption tax is raised to 10 percent from the current 8 percent in 2019.

The government will formally approve the budget plan at a ministerial meeting to be held in mid-December.

Torrential rain devastated wide areas of western Japan in early July, killing about 230 people in the summer, and a magnitude 6.7 earthquake rocked Japan’s northernmost main island of Hokkaido in September, leaving more than 40 people dead and causing a blackout on the island.

A powerful typhoon also temporarily shut down Osaka’s main airport, the main international air gateway to the western Japan region in September.

The government has already set a record-high initial budget of ¥97.71 trillion for the year through March, and an earlier supplementary budget of ¥935.6 billion was enacted last month to aid disaster recovery.