Prime Minister Fumio Kishida said on Friday that the government will finalize new inflation measures around this autumn and provide cash handouts to low-income households struggling to weather the cost-of-living crisis.
The support comes on top of government subsidies that Kishida also pledged to maintain to cut household energy bills. Rising prices have weighed heavily on consumers despite the prime minister’s emphasis on redistributing wealth through wage increases.
The announcement comes as Kishida strives to shore up support for his cabinet amid growing voter discontent over a political funding scandal and his handling of an inflation-hit economy.
The prime minister, who also serves as leader of the ruling Liberal Democratic Party, has so far denied speculation that he would dissolve the House of Representatives and call a general election.
Prime Minister Fumio Kishida held a press conference in Tokyo on June 21, 2024, following the effective closing of the 150-day regular Diet session. (Kyodo News) ==Kyodo News
Under the plan announced by Prime Minister Kishida, the government will resume subsidies to reduce electricity and gas prices for households from August to October, a period when energy demand tends to increase during the summer.
Government subsidies given to oil wholesalers to curb increases in retail gasoline prices will remain in place until the end of the year.
Kishida stressed the need for government support to reach vulnerable groups such as pensioners and small and medium-sized businesses.
The prime minister did not specify how the funds would come from for cash payments and other measures, but a government source said the government would consider compiling a supplementary budget for this fiscal year, which runs until March next year.
“With inflation remaining high, we need to consider providing support to those who may be left behind,” Kishida said at a news conference marking the effective end of the 150-day regular Diet session.
“Petrol, electricity and gas subsidies go against our efforts to decarbonise and cannot continue forever, but we will keep them this time because higher prices are directly hurting local economies and low-income households,” he added.
Japan’s inflation rate is much lower than in other countries, such as the United States, where central banks are aggressively raising interest rates.
Most of the price increases in Japan are due to higher costs of imported energy and raw materials, exacerbated by the weak yen.
Consumer price inflation remains above the Bank of Japan’s 2% target. Excluding volatile fresh food, consumer price inflation rose 2.5% in May from a year earlier, government data released on Friday showed.
Kishida said at a press conference on Friday that the new energy-related measures aim to lower monthly consumer prices by an average of more than 0.5 percentage points.
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