Japan passes supplementary budget worth 130 trillion yen... Concerns over fiscal deterioration

Measures Against High Inflation and AI Semiconductor Industry Promotion
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The Japanese government's supplementary budget bill passed the House of Councillors (upper house) on the 17th. The supplementary budget amounts to 13.9433 trillion yen (approximately 130 trillion won). This supplementary budget will mainly be used in three areas: economic growth, overcoming high inflation, and ensuring public safety.

Yonhap News

According to local Japanese media, the ruling Liberal Democratic Party, coalition partner Komeito, opposition parties Japan Innovation Party and Democratic Party for the People, among others, approved the supplementary budget bill in the House of Councillors on the same day.

The Japanese government plans to use the supplementary budget to provide 30,000 yen (approximately 280,000 won) to low-income households and cover electricity bills and other expenses. The budget will also be allocated for recovery efforts in the Noto Peninsula of Ishikawa Prefecture, which was hit by a strong earthquake measuring 7.6 in magnitude in January this year. A total of 1.3054 trillion yen (approximately 12 trillion won) has been allocated to support artificial intelligence (AI) and the semiconductor industry.

This supplementary budget is expected to further worsen Japan's fiscal situation. Following the issuance of new government bonds to cover more than 35 trillion yen (approximately 326 trillion won) of the 2024 fiscal year’s main budget resources, nearly half of the supplementary budget, amounting to 6.69 trillion yen (approximately 62 trillion won), will also be financed through new government bond issuance.