Japanese PM Fumio Kishida Announces Economic Measures to Tackle Inflation
TOKYO, Nov 2 (Reuters) – Japanese Prime Minister Fumio Kishida has announced that the government will allocate more than 17 trillion yen ($113 billion) towards a package of measures aimed at cushioning the economic impact of rising inflation. The measures will include tax cuts.
To fund a portion of these spending initiatives, Kishida revealed that the government will compile a supplementary budget for the current fiscal year, amounting to 13.1 trillion yen.
A previous Reuters report mentioned the government’s consideration of spending over 17 trillion yen for the package. This package will incorporate temporary reductions in income and residential taxes, as well as subsidies to alleviate the burden of gasoline and utility bills.
Rising inflation, driven by increased costs of raw materials, has persisted above the central bank’s target of 2% for more than a year. This has had a dampening effect on consumption and has clouded the outlook for Japan’s economy, which is still recovering from the impacts of the COVID-19 pandemic.
The escalating cost of living has contributed to a decline in Kishida’s approval ratings, putting pressure on the prime minister to take action to alleviate the strain on households.
Considering the slow pace of wage increases in comparison to rising prices, Kishida stated that the government will offset the blow by returning some of the anticipated increase in tax revenues to households, which has been generated by solid economic growth.
($1 = 150.5100 yen)
Reporting by Yoshifumi Takemoto, writing by Leika Kihara; Editing by Kim Coghill
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