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Japan lower house passes record extra budget to prop COVID-hit economy - Metro US

Japan lower house passes record extra budget to prop COVID-hit economy

Japan's Prime Minister Fumio Kishida attends the opening of an extraordinary session of parliament in Tokyo

TOKYO (Reuters) – Japan’s lower house of parliament on Wednesday passed the government’s biggest-ever extra budget worth $316 billion as it looks to spur a recovery from COVID-19 pandemic.

The first extra budget under new Prime Minister Fumio Kishida underscored the challenge of juggling hefty spending to protect the crisis-hit economy while managing the industrial world’s heaviest debt burden.

Kishida’s government has set its priority on reviving growth near-term over fiscal reform in the long run, targeting wealth-distribution to citizens under his “new capitalism” aimed at generating a virtuous cycle of wage hikes and economic growth.

The extra 36 trillion yen ($316 billion) in spending for this fiscal year will be partly financed by additional government bonds worth some 22 trillion yen.

The supplementary budget will be followed by the compilation of an annual state budget for fiscal 2022/23 later this month. Kishida has vowed to implement seamless spending over a 16-month period to keep the world’s third-largest economy afloat.

The extra budget featured controversial payouts of 100,000 yen per child to families with children, but central and local governments have wrangled over payments – lump-sum cash payments, divided payments, or half cash/half shopping vouchers.

The budget is also targeted at promoting tourism, ensuring corporate funding, boosting growth in the green and digital sectors and strengthening semiconductor factories and supply chains.

Kishida’s cabinet last month unveiled the 79 trillion yen economic package with a record 55.7 trillion yen in spending.

The extra budget bill is expected to sail through the upper house of parliament later this month given Kishida’s ruling bloc holds a solid majority in the both chambers.

($1 = 113.7600 yen)

(Reporting by Tetsushi Kajimoto; Editing by Lincoln Feast)

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