PM Takaichi Vows to Submit Draft Extra Budget Next Week

Tokyo, May 25 (Jiji Press)–Japanese Prime Minister Sanae Takaichi said Monday that the government will compile a draft fiscal 2026 supplementary budget to deal with high inflation reflecting Middle East tensions for submission to the Diet, or parliament, next week. The size of the extra budget will be slightly more than 3 trillion yen, she told reporters. The government will set up new reserve funds in response to the Middle East situation that can be used for measures related to higher energy prices, she said. Takaichi also said that planned utility-related subsidies will reduce electricity and gas bills in July-September by a total of about 5,000 yen per household. “We will strengthen our efforts to prevent impacts on people’s lives and livelihoods as well as economic activities,” she said. About 500 billion yen from the 1-trillion-yen reserve funds under the fiscal 2026 state budget will be used for the electricity and gas subsidies for this summer. The measure is expected to be adopted at a cabinet meeting Tuesday. Takaichi said electricity and gas bills after the aid will be lower than the levels for last summer. The fiscal 2026 reserve funds will be increased to 1 trillion yen again under the envisioned supplementary budget. The extra budget will also include funds for additional local subsidies to support users of liquefied petroleum gas. Regarding gasoline subsidies, Takaichi said, “We’ll respond appropriately also by using reserve funds.” Resources that remain for gasoline subsidies are expected to run out by the end of June. The government will issue additional deficit-covering bonds to finance the supplementary budget, the prime minister said. But an increase in the total issue amount for fiscal 2025-2026 can be avoided since the government will likely be able to do without issuing 3 trillion yen worth of earlier-planned deficit-covering bonds thanks to increases in tax and nontax revenues, Takaichi explained. Takaichi also said the country “will be able to procure oil in a stable way until next spring,” adding, “It will be possible to supply naphtha-based products until after the start of next year.” The government will make energy-saving requests again this year, she said. END [Copyright The Jiji Press, Ltd.]