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TOKYO (Kyodo) — The Japanese government is eyeing new government bond issuance of 6.7 trillion yen ($44 billion) to fund a supplementary budget required for a stimulus package planned by Prime Minister Shigeru Ishiba, sources close to the matter said Thursday.
Ishiba’s Cabinet is expected to approve a 13.9 trillion yen extra budget plan on Friday aimed at easing the financial burden on households amid rising prices, the sources said.
The government will likely use a tax surplus of 3.8 trillion yen in the current fiscal year to March, mainly resulting from strong corporate earnings, to finance the economic package, according to the sources.
The issuance of additional government bonds to cover the remainder of the 13.9 trillion yen budget will further worsen Japan’s fiscal health, the worst among developed economies.
Ishiba’s administration aims to secure parliamentary approval for the draft budget by the end of the extraordinary Diet session through Dec. 21.
Of the total, 3.4 trillion yen will likely be used for inflation relief including subsidies to curb electricity, gas and gasoline prices, cash benefits for households exempt from residential taxes, such as low-income families and seniors, and additional handouts for families with children.
The government is set to spend 5.8 trillion yen on stimulus measures with a focus on supporting regional economies as well as key sectors like artificial intelligence and semiconductors.
It is also expected to allocate 4.8 trillion yen for measures to strengthen public security and safety, following a series of natural disasters and an increase in robberies.