Fumio Kishida, the prime minister of Japan, announced on Thursday that the country will spend over 17 trillion yen ($113 billion) on a package of policies to lessen the impact of growing inflation on the economy. These policies will include tax cuts.
According to Kishida, the government would create a 13.1 trillion yen supplemental budget for the current fiscal year in order to pay for a portion of the spending.
According to sources, the government is thinking of allocating more than 17 trillion yen for the package, which will include short-term reductions in income and property taxes along with subsidies to lower energy and gas costs.
For almost a year, inflation has been over the central bank’s objective of 2 percent, driven by growing raw material costs. This has adversely affected consumption and cast doubt on the economy’s ability to recover quickly from the COVID-19 damage.
Kishida’s approval ratings have declined, in part due to rising living expenses, which has increased pressure on the prime minister to take action to lessen the burden on households.
Kishida had stated that the government will lessen the damage by giving households a portion of the anticipated rise in tax revenues brought about by strong economic growth, since salary rises are proving to be too sluggish to keep up with growing prices.
