Japan Considers Extending Fuel Subsidies to Tackle Rising Gasoline Prices
Government Considers Extending Subsidies
Japan’s government is contemplating extending subsidies to curb gasoline prices, a move aimed at moderating inflation in the world’s third-largest economy. According to Kyodo news agency, the subsidies, originally set to end in January next year, could potentially last until March and may extend even further depending on discussions between the government and the ruling coalition. These subsidies are part of a larger package of measures the government plans to implement by the end of this month to alleviate the impact of rising living costs on households and small businesses.
Prolonged Subsidies to Be Funded by Supplementary Budget
The government intends to fund the extended subsidies by compiling a supplementary budget for the current fiscal year ending in March 2024. Additionally, the government is also considering extending the deadline for subsidies aimed at curbing utility bills. These decisions regarding subsidies are expected to have implications on the Bank of Japan’s inflation forecasts for the upcoming year, which play a crucial role in determining the timing of an exit from the ultra-loose monetary policy.
Bank of Japan’s Upcoming Forecasts
The Bank of Japan is set to issue fresh quarterly growth and inflation forecasts at its upcoming policy-setting meeting on October 30-31. The decision on the subsidies may impact these forecasts, highlighting the significance of the government’s actions in steering the nation’s economic trajectory.
In conclusion, the Japanese government is considering extending fuel subsidies as part of its efforts to tackle rising gasoline prices. These measures aim to alleviate the financial burden on households and small businesses, and their impact on inflation forecasts will be closely watched. The government’s funding plans through a supplementary budget and the upcoming Bank of Japan meeting further add to the significance of these decisions.
