TOKYO (AP) — Japan’s parliament enacted a 2.7 trillion yen ($21 billion) extra budget on Tuesday to tackle soaring fuel and food prices following Russia's invasion of Ukraine.
The extra budget is for the current fiscal year that started April 1 and will fund part of a 6.2 trillion yen ($48 billion) emergency economic package that Prime Minister Fumio Kishida’s government adopted in late April, which includes subsidies to oil wholesalers to minimize the impact on consumers.
Nearly 1.2 trillion yen ($9.4 billion) will be used to extend the current oil subsidy program through the end of September.
Crude oil prices have risen sharply due to fears of disruptions in supplies from Russia due to its invasion of Ukraine. Wheat and corn prices are also up significantly, prompting food prices to soar.
The extra budget will be financed by a new issuance of government bonds, adding a burden to the world’s third-largest economy, whose fiscal health is already the worst among major economies.
Japan enacted an initial budget for the current fiscal year totaling a record 107.60 trillion yen ($840 billion), including 5.5 trillion yen ($4.2 billion) in reserve funds for COVID-19 pandemic measures and other emergency purposes.