Japanese Prime Minister Fumio Kishida has directed the ruling coalition to create new measures to tackle rising prices within the next two weeks, according to Kyodo news agency.
This move is aimed at supporting Japan’s fragile post-COVID economic recovery amid escalating living costs, especially for energy and food.
Inflation is hitting household consumption and smaller businesses hard, dampening hopes for a swift rebound from the pandemic.
The global economic slowdown, driven by widespread interest rate hikes led by the U.S. Federal Reserve, is also affecting growth in Japan.
Koichi Hagiuda, policy chief of the ruling Liberal Democratic Party (LDP), stated, “We want to kick off the process (of drafting measures) as early as next week.”
Prime Minister Kishida has asked the LDP and its coalition partner, the Komeito party, to prepare their proposals by March 17, per Kyodo’s report.
Natsuo Yamaguchi, Komeito’s leader, urged that new measures be finalized by the end of the month, using a large reserve fund allocated for emergencies.
Chief Cabinet Secretary Hirokazu Matsuno confirmed that the government will consider using these reserves and work closely with the ruling coalition to protect citizens and businesses from rising costs.
Matsuno acknowledged that ongoing price hikes for food and other essentials are driven by existing raw material inflation and a weak yen.
If approved, these new measures will build on a 39 trillion yen ($285 billion) fiscal package announced in October, which included subsidies to reduce retail electricity bills by 20%.
Data released on Friday showed that Japan’s consumer prices rose at a slower rate in February, thanks to energy subsidies, but an index excluding fuel costs hit a new three-decade high, indicating growing inflationary pressures.
The government is considering requesting that major utilities lower household price increases, given recent drops in energy prices, Kyodo reported.
With local elections approaching, the pressure on the government to spend more remains high, further straining Japan’s public debt, which is already the highest among industrial nations at over twice the size of its economy.
