Japan is considering an additional economic stimulus package focusing on boosting consumption dampened by the novel coronavirus pandemic, government sources said Tuesday.
Prime Minister Yoshihide Suga is expected to instruct officials to draw up the specifics next month at the earliest, with the draft of the government's third supplementary budget for fiscal 2020 to be compiled by the end of the year to finance the policy measures, the sources said.
The draft extra budget is likely to be submitted to next year's ordinary Diet session convening in January, during which the initial budget for the next fiscal year from April 2021 is also set to be discussed.
"Stock prices are solid, but there are concerns over the employment situation and some industrial sectors," a senior government official said.
Suga is likely to make a decision on the budget based on upcoming economic indicators, including gross domestic product data for July-September due out Nov. 16, the sources said.
The ruling camp led by Suga's Liberal Democratic Party is asking for a third extra budget.
"It is necessary to carry out intensive reform and make investments in such new fields as digitalization and supply chains." Chief Cabinet Secretary Katsunobu Kato said during a news conference Tuesday.
"The government will launch economic measures flexibly in a timely manner without hesitation when necessary," he added.
Part of the new countermeasures in the upcoming package will be funded by the fiscal 2021 budget, according to the sources.
Among the envisaged steps is an extension of the Go To campaigns, under which the government covers part of the costs of domestic tourist trips and dining out to encourage consumption and help revive tourism and food services, two sectors hit hard by the pandemic, the sources said. The programs are effective through January.
Along with fiscal spending, some taxation measures to relieve those struggling amid the pandemic are on the table, according to the sources.
For anti-virus stimulus packages under the administration of Suga's predecessor Shinzo Abe, the Diet has already passed two supplementary budgets totaling about ¥57 trillion ($540 billion) for the current fiscal year. They will be partially financed by nearly ¥46 trillion in deficit-covering bonds.
The government set aside a total of ¥11.5 trillion in reserve funds under the two extra budgets to be used in the fight against the coronavirus, with about ¥7.8 trillion remaining.