Japan passes record extra budget to back Covid-hit economy

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The Japanese parliament has approved a record 36.0 trillion yen ($320 billion) supplementary budget for fiscal 2021 aimed at supporting the Covid-battered economy.

The Japanese government will be forced to issue new bonds worth 22.1 trillion yen to finance the majority of the supplementary budget, reports Xinhua news agency.

As a result, the outstanding balance of government bonds, which need to be cleared by tax revenue, is expected to surpass 1,000 trillion yen by March.

The draft of the extra budget was approved by Prime Minister Fumio Kishida’s Cabinet late last month and passed the House of Representatives on Wednesday.

In the budget, fiscal spending totalled a record 55.7 trillion yen, with 31.6 trillion yen for the government’s new stimulus plan revealed in November.

As a precautionary measure for another possible wave of the pandemic this winter, Kishida’s policy package largely leaned towards curbing Covid-19 amid fears over the spread of the Omicron variant.

Of the total extra budget, 18.6 trillion yen was earmarked for measures to curb the spread of Covid-19 and support medical institutions.

In particular, 2.0 trillion yen was set aside as subsidies to help medical institutions secure more beds for Covid-19 patients.

To support promotion of the government’s Covid vaccination program and procurement of treatment drugs, 1.3 trillion yen and 601.9 billion yen were allocated, respectively.

As a key policy measure in the stimulus package, 1.2 trillion yen will be used for the government’s handout program of cash and vouchers for children aged 18 or younger in households where the primary earner’s annual income is below 9.6 million yen.

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