Japan calls for extra budget to parliament for economy impacted by COVID-19

Japan’s government on Monday submitted to parliament a draft extra budget for the fiscal year 2021 worth a record 36 trillion yen ($320 billion) for partial financing of its latest economic package. As per Kyodo News, the Japanese government’s move is aimed at helping the economy recover from the COVID-19 pandemic. With the first supplementary budget for the current fiscal year through March, Japanese Prime Minister Fumio Kishida’s administration will also gear up for another wave of COVID-19 pandemic that could be recorded in winters amid growing concerns over the Omicron variant.

Reportedly, the extra budget entails a fresh government bond issuance worth 22.1 trillion yen. This has further triggered fears of another deterioration in the nation’s fiscal health which is remarkably worst among the major developed countries. The draft supplementary budget was approved by the Cabinet late last month as Japan recorded significantly lower numbers of the new Coronavirus infections due to the government ramping up the vaccination program. 

Japanese Finance Minister Shunichi Suzuki reportedly acknowledged that the country’s economy “remains in a severe situation” and asked the lawmakers for a quick enactment of the budget. During an address at a plenary session of the House of Representatives, Suzuki reportedly said, “Taking this opportunity, we need to work for an early resumption of socio-economic activities while making every effort for risk management.”

He was further quoted by Kyodo as saying, “To put the economy on a self-sustaining growth track by realizing a virtuous cycle of economic growth and distribution (of wealth), this supplementary budget is required to be enacted as soon as possible.”

Budget expected to be approved by National Diet

The budget is expected to be approved by the National Diet, the bicameral legislature of Japan, in a parliamentary session that was convened on Monday and will be continued through 21 December. Out of the total, 31.6 trillion yen will be used for the newly compiled stimulus plan that entails a record 55.7 trillion yen in fiscal spending. Additionally, the policy package is worth around 78.9 trillion yen when private funds are included. Kyodo stated that among the planned outlays, 18.6 trillion yen will be allocated for the measures to prevent the virus from spreading and cushioning the economic impact of the pandemic.

(IMAGE: AP)