Japan’s government is poised to approve a major economic stimulus package in response to ongoing inflation, with some concessions made to the opposition parties. The economic plan, which is expected to total 39 trillion yen ($252 billion), is designed to bolster consumer spending amid rising living costs, particularly energy prices.
The stimulus will include measures like subsidies for high electricity, gas, and fuel costs, as well as cash handouts for low-income households. The country’s economy, which had seen brief growth earlier this year, continues to struggle with stagnation, exacerbated by rising inflation.
Japan’s ruling coalition, led by the Liberal Democratic Party (LDP) and Komeito, faces a challenge in securing approval for the package, as it holds a minority in the lower house of parliament. The LDP recently lost its parliamentary majority after elections in October 2024, making it reliant on support from opposition lawmakers to push through critical legislation, including a supplementary budget for fiscal year 2025.
To gain the necessary backing, the government agreed to the opposition’s demands, including raising the tax-free income threshold and considering reductions in gasoline taxes. The compromise was reached with the Democratic Party for the People (DPP), which holds 28 seats in parliament and will help the LDP secure the votes needed to pass the stimulus package.
If finalized, the stimulus package will be an important step in addressing the economic pressures facing many Japanese citizens, particularly those struggling with rising costs.
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