Japan Govt Adopts 3.1-T.-Yen FY 2026 Extra Budget

Tokyo, June 3 (Jiji Press)–The Japanese government at an extraordinary cabinet meeting Wednesday adopted a draft fiscal 2026 supplementary budget with general-account spending of 3,113.5 billion yen. The extra budget for the year that started in April is mainly intended to set up new reserve funds for measures in response to Middle East tensions. The supplementary budget will be fully financed through the issuance of deficit-covering government bonds. The government plans to submit the draft budget to the Diet, Japan’s parliament, later on Wednesday, aiming to secure its early enactment. Of the total spending, 2.5 trillion yen is set to be allocated for the new reserve funds, which will be mainly used to increase financial resources for gasoline subsidies. Existing resources for the subsidies aimed at lowering gasoline prices are expected to run out shortly. The government will allot 100 billion yen for local grants for mainly supporting users of liquefied petroleum gas, while 513.5 billion yen will be used to increase general reserves for reducing electricity and gas bills. As tax revenue is increasing, the government expects to be able to cut its fiscal 2025 deficit-covering bond issues by 3 trillion yen from the earlier planned amount. The total issue amount of deficit-covering bonds will therefore remain unchanged even if the government issues such bonds to finance the fiscal 2026 supplementary budget, according to government officials. Following the compilation of the supplementary budget, meanwhile, Japan’s primary budget balance will swing to the red from a surplus at the time of the enactment of the initial budget for fiscal 2026. END [Copyright The Jiji Press, Ltd.]