The Japanese government has reportedly compiled a ¥6.2 trillion ($48 billion) emergency economic package to cushion the impact of rising prices on households and smaller businesses in the country, which is partly due to the Russia-Ukraine war.
The main features of the relief package are cash handouts of ¥50,000 per child for the country’s low-income families, support for struggling livestock farmers and small and medium-sized firms, and more subsidies for oil wholesalers in order to lower retail gasoline prices.
With the Japanese economy yet to completely recover from the Covid pandemic, these measures come amidst rising fuel and food prices that are threatening consumer sentiment, ahead of a House of Councilors election due in July.
When the use of private-sector funds is taken into account, the size of the economic package will reach ¥13.2 trillion ($103 billion).
The government will be acquiring ¥1.5 trillion ($11.7 billion) from the reserve funds allotted for emergency spending, and around ¥2 trillion ($15.6 billion) from the fiscal 2022 budget and other sources.
Another ¥2.7 trillion ($21 billion) will be secured from a supplementary budget that will be compiled later after an agreement is reached between the ruling party Liberal Democratic Party and Komeito, which serves as LDP’s junior coalition partner
The relief package targets four major issues — controlling the surge in oil prices, ensuring a stable supply of food, helping struggling households, and supporting small and medium-sized businesses.
The government will be increasing the current subsidy from ¥25 to ¥35 for oil wholesalers and will include fossil fuels as well as aviation fuel. It will also extend the current zero-interest loans without a collateral program will continue till September-end.
For households, the government will keep the prices of imported wheat it sells at the same level they were before they began increasing due to the war in Ukraine until September, and also help in the procurement of raw materials and rare earth elements for curbing the country’s dependence on Russia.
The Marine product processing industry will also be assisted in procuring seafood from other countries in place of Russia.