The Japanese government has approved a package of additional measures to stimulate the economy and curb price increases worth 21.3 trillion yen (135 billion USD), which will be distributed during the current fiscal year (ending March 31, 2026). The decision was approved at a cabinet meeting chaired by Prime Minister Sanae Takaichi.
With the addition of funds for local governments and private businesses, the package will reach 42.8 trillion yen (almost $273 billion), according to estimates by the Kyodo news agency.
The prime minister has pledged to pursue an active fiscal policy aimed in particular at boosting support for the ruling Liberal Democratic Party, which performed poorly in the last general election and now finds itself in a minority in both houses of parliament. Among other things, the government intends to subsidize household electricity and gas bills from January to March, reducing them by approximately 2,000 yen (approximately 13 USD) per month for each family.
The government also plans to remove one of the excise taxes on gasoline to stimulate private activity in the country. It is proposed to provide one-time benefits for children under 18 and distribute coupons for rice and other food products to the population.
The government also plans to use various financial incentives to stimulate investment in shipbuilding and the development of artificial intelligence systems, which are considered key to stimulating economic growth.
The current package of measures is expected to temporarily reduce consumer prices by 0.7% and increase Japan's gross domestic product by 1.4%, according to cabinet documents. However, some economists doubt the effectiveness of the proposed measures, arguing that they could only fuel inflation, the Kyodo news agency noted.