People wearing protective masks walk around the famed Shibuya scramble crossing in a shopping and entertainment district on Oct 25, 2021 in Tokyo. (KIICHIRO SATO / AP)
TOKYO – Japan's Cabinet will likely approve Tuesday a draft extra budget for fiscal 2022 to the tune of 2.7 trillion yen ($20.88 billion) to help mitigate surging prices for energy, food and other commodities as a result of the Russia-Ukraine conflict.
The extra budget for the year, once it gets the nod from parliament, will be used in part to finance a 6.2 trillion yen package that was put together in late April.
To top up the reserve funds, around 1.5 trillion yen has been earmarked. The Japanese government has been using these funds to activate relief measures such as providing subsidies for energy wholesalers to lower their retail prices and not simply pass on the extra costs to households for the time being.
The Japanese government, from the initial relief package which doesn't require parliamentary approval for funds to be drawn on, has also been offering 50,000 yen in cash handouts per child for low-income households
The government, from the initial relief package which doesn't require parliamentary approval for funds to be drawn on, has also been offering 50,000 yen in cash handouts per child for low-income households.
In late March, a record 107.60 trillion yen budget for fiscal 2022 was enacted, part of which includes 5.5 trillion yen in reserve funds allocated specifically for emergency purposes, particularly those pertaining to the COVID-19 pandemic.
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The remainder of the extra budget, which amounts to 1.2 trillion yen, is set aside to continue with providing subsidies to oil wholesalers until the end of September.
Energy and other commodity prices have been rising while the global coronavirus pandemic was improving, although rising inflation continues to threaten prices.
In addition, supply and supply chain issues, which had also been one of the downside factors of the pandemic, have also been punctuated by the Russia-Ukraine conflict.
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This has led to a jump in not just energy prices like fuel for resource-poor Japan, but also raw food materials, including grain and wheat, both of which Russia and Ukraine are major suppliers of.
The ruling Liberal Democratic Party and its junior coalition partner Komeito are aiming to start parliamentary debate on the draft extra budget on May 25 to enact it by the end of this month, a coalition source was quoted by local media as saying Tuesday.