TOKYO (Reuters) -Japanese Prime Minister Fumio Kishida has ordered the ruling coalition to draft additional measures over the next two weeks to counter price hikes, Kyodo news agency reported on Friday, a move aimed at bolstering a fragile post-COVID economic recovery.
The news comes as households grapple with intensifying cost-of-living pressures amid elevated inflation for items such as energy and food, hitting consumption and smaller businesses.
A global economic slowdown due to sweeping interest rate increases across many countries, led by the U.S. Federal Reserve, has dragged on growth in Japan and undercut hopes for a quick post-COVID revival.
“We want to kick off the process (of drafting measures) as early as next week,” Koichi Hagiuda, policy head of the ruling Liberal Democratic Party (LDP), told reporters after a meeting with the premier.
Kishida asked LDP and its small coalition ally Komeito party to compile their measures and make the proposal to the government by March 17, Kyodo reported.
Komeito chief Natsuo Yamaguchi earlier called for compilation of new measures by the end of this month, tapping a vast amount of budget reserves set aside for emergency spending.
Chief Cabinet Secretary Hirokazu Matsuno said the government will consider necessary steps including the use of budget reserves, while closely communicating with the ruling bloc, to protect citizens and businesses from rising costs.
“We are aware that price hikes in food and other items are still carrying on due to existing raw material inflation and a weak yen,” Matsuno told a Friday afternoon press conference.
The new measures, if adopted, will come on top of a 39 trillion yen ($285 billion) fiscal package unveiled in October to curb the impact of inflation for households and businesses, including steps such as subsidies to cut retail electricity bills by 20%.
Thanks to the energy subsidies, a leading indicator of Japan’s consumer prices rose at a slower pace in February, data showed on Friday. However, an index stripping away the effect of fuel hit a fresh three-decade high in a sign of broadening inflationary pressures.
The Japanese government will consider asking major utilities to reduce price increases for households in light of recent declines in energy prices, Kyodo news agency reported on Friday.
The pressure on the government to spend more will remain strong as nationwide local elections draw near later this year, further straining the industrial world’s heaviest public debt burden at more twice the size of Japan’s economy.
($1 = 136.6900 yen)
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