TOKYO (AP) – Japan’s Parliament enacted a JPY2.7 trillion (USD21 billion) extra budget on Tuesday to tackle soaring fuel and food prices following Russia’s invasion of Ukraine.
The extra budget is for the current fiscal year that started on April 1 and will fund part of a JPY6.2 trillion (USD48 billion) emergency economic package that Prime Minister Fumio Kishida’s government adopted in late April, which includes subsidies to oil wholesalers to minimise the impact on consumers.
Nearly JPY1.2 trillion (USD9.4 billion) will be used to extend the current oil subsidy programme through the end of September.
Crude oil prices have risen sharply due to fears of disruptions in supplies from Russia due to its invasion of Ukraine.
Wheat and corn prices are also up significantly, prompting food prices to soar.
The extra budget will be financed by a new issuance of government bonds, adding a burden to the world’s third-largest economy, whose fiscal health is already the worst among major economies.
Japan enacted an initial budget for the current fiscal year totalling a record JPY107.60 trillion (USD840 billion), including JPY5.5 trillion (USD4.2 billion) in reserve funds for COVID-19 pandemic measures and other emergency purposes.