Japan Panel Members Call for Extra Budget Topping 14 T. Yen

Tokyo, Nov. 12 (Jiji Press)–Two new private-sector members of a key Japanese government panel Wednesday called on the government to compile a fiscal 2025 supplementary budget worth at least 14 trillion yen to fund upcoming comprehensive economic measures. The two members said at a meeting of the Council on Economic and Fiscal Policy that the envisaged extra budget should exceed the 13.9 trillion yen of the government’s supplementary budget for fiscal 2024, which ended in March. They also urged the government to abandon its goal of achieving a surplus in the primary balance at the central and local governments. At the meeting, Prime Minister Sanae Takaichi said, “This is a period of major challenges and great transformation” toward achieving a strong economy. She indicated plans to deepen discussions based on opinions from private-sector members, including the possibility of adjusting fiscal consolidation targets according to inflationary conditions. The proposals came from Masazumi Wakatabe, a former Bank of Japan deputy governor known for supporting aggressive monetary easing, and Toshihiro Nagahama, an economist at Dai-Ichi Life Research Institute Inc., who advocates growth strategies driven by fiscal measures. The council held its first meeting since the launch of the Takaichi administration last month to discuss the economic measures that are expected to be finalized soon. Wakatabe and Nagahama noted the possibility that the Japanese economy had experienced significant negative growth in July-September. Nagahama said, “If the size of the proposed fiscal 2025 extra budget does not exceed last year’s level, there is a risk of dampening expectations for an aggressive fiscal policy,” advocated by the prime minister. The two also urged the government to scrap its long-standing target of achieving a surplus in the primary balance, an indicator of how much government spending on policies such as social security and public works is covered by tax and other revenues without relying on debt. Takaichi has said she will review single-fiscal-year targets for turning the primary balance into a surplus. Wakatabe said that the target was a product of the deflationary era and has already fulfilled its historical role. Nagahama called for setting a new target, warning that adhering to the surplus goal could result in insufficient fiscal spending in the future. BOJ Governor Kazuo Ueda also attended the meeting. END [Copyright The Jiji Press, Ltd.]