TOKYO- Japan’s cabinet approved its first extra budget for this fiscal year on Friday with spending worth $315 billion to cushion the blow from the COVID-19 pandemic, as the country keeps its stimulus taps open even as other economies close theirs.
Featuring cash payouts to households with children, financial support for corporations and tourism discounts, the extra budget contains some elements of populist spending despite the image of Prime Minister Fumio Kishida as a fiscal hawk.
Kishida is prioritizing economic growth over fiscal reform near-term to encourage citizens to share the fruits of growth under a wealth distribution policy dubbed “new capitalism.” He remains under pressure to top up spending in the run-up to upper house elections next summer.
“Japan is in the midst of a coronavirus crisis and the stimulus package has been compiled based on our stance of mobilizing necessary fiscal spending without hesitation,” Finance Minister Shunichi Suzuki told reporters after a cabinet meeting.
