Japan’s upcoming economic stimulus package is expected to include an extra budget of more than 29 trillion yen ($198 billion), far exceeding a previous estimate, national broadcaster NHK reported on Thursday.
Only a day earlier, Japanese media had reported that the government was set to spend about 25 trillion yen on the stimulus package, aimed at easing the pain from rising energy and other living costs.
Lawmakers from the ruling Liberal Democratic Party objected to the lower estimate citing heightened uncertainty over the economy, prompting Prime Minister Fumio Kishida and Finance Minister Shunichi Suzuki to meet on Wednesday evening to review the plan, NHK reported.
Japan’s public debt is already the biggest among major economies at twice the size of its economy. The extra spending, which is likely to be finalised on Friday, is expected to be partially funded by additional debt issuance, raising concerns over Japan’s fiscal discipline.
With his approval ratings plunging, Kishida has been under pressure to take steps to alleviate the blow to households and retailers from rising fuel and food prices, which have been exacerbated by a roughly 30% rise in the dollar against the yen.
Under the stimulus package, the government will extend a gasoline subsidy to curb rising energy costs for households and businesses until the first half of the next fiscal year, a draft document seen by Reuters showed on Wednesday.
It will also include support for rising electricity bills, which will be implemented as early as next January, according to the draft. ($1 = 146.3200 yen)