Tokyo: The Japanese government on Thursday approved a comprehensive economic package featuring measures to help households hit by rising prices and promote corporate investments.
The package, worth over 17 trillion yen, includes individual income and residential tax cuts and cash benefits to low-income people.
Through the package, adopted at a cabinet meeting, the government aims to put the Japanese economy, still recovering from the COVID-19 crisis, on a private demand-led growth path and pave the way for a full end to deflation.
Earlier on Thursday, Prime Minister Fumio Kishida said that the amount of additional general-account spending under the planned fiscal 2023 supplementary budget will be around 13.1 trillion yen.
The government aims to submit a draft of the budget soon to ensure enactment during the current extraordinary session of the Diet, the country’s parliament, running until Dec. 13.
The package is forecast to push up the country’s real gross domestic product by 19 trillion yen and lower consumer prices by 1.0 percent over the years, the Cabinet Office said.
Under the package, about 2.7 trillion yen will be spent to combat persistent inflation, 1.3 trillion yen to facilitate sustainable wage hikes and regional economic growth, and 3.4 trillion yen to encourage domestic investment in semiconductor, space, and other fields.
It also includes 1.3 trillion yen on measures to tackle the declining population and promote digital reform, and 4.3 trillion yen mainly for boosting national resilience from disasters.
The government will also implement a fixed-amount cut of 30,000 yen per person in income tax and 10,000 yen in residential tax from June 2024. Fully 70,000 yen will be provided to low-income households exempt from paying resident tax.
These measures, aimed at easing the impact of inflation on households, will total around 5 trillion yen.
The government will extend measures to tackle soaring gasoline and other fuel prices and to curb electricity and gas bills until the end of April.
The package also includes measures to promote investments, including beefing up semiconductor production bases in Japan and setting up a fund worth around 1 trillion yen for the Japan Aerospace Exploration Agency, or JAXA.
The overall size of the policy package, including spending by local governments and the private sector, totals 37.4 trillion yen.
The size is about half that of another economic package adopted in autumn last year. Still, the new package is seen sparking concern over a fiscal deterioration.
JIJI Press
