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By Daniel Leussink and Kentaro Sugiyama
TOKYO (Reuters) – Japan’s government on Friday unveiled short-term stimulus measures to mitigate the economic blow of high food and energy costs on low-income households, businesses and farmers.
The government’s decision to implement new policies and expand existing ones underscores Fumio Kishida’s determination to fight the effect of pressures from emerging positions by offering help to businesses and consumers.
“Protecting people’s lives and business activity amid rising global costs is one of the Kishida administration’s most sensible priorities,” Kishida said Friday at a panel assembly tasked with emerging costs and wage issues.
As part of those measures, the government will provide 50,000 yen ($350) in cash to low-income families exempt from paying tourist taxes to help them pay for emerging electricity, fuel and food costs.
Other measures included extending existing subsidies to keep feed costs low for ranchers and dairy farmers beyond October, as well as for farmers who have worked to decrease the use of chemical fertilizers.
The government would also oppose increasing the value of imported wheat it sells to stores beyond October, which would necessarily make it possible for families to cope with emerging commodity prices by reducing pressure on the value of bread and noodles.
It would also lose more budget for a regional grant program.
In the electricity sector, the government would extinguish existing subsidies for gas and other fuels until the end of December, it plans to overhaul the cap-on system.
It also aims to restart up to nine nuclear power plants in the winter to ensure a solid source of electricity.
LIMITED ECONOMIC IMPACT
“This is a package aimed at mitigating the negative impact (of value increases) rather than providing a domino effect,” said Toshihiro Nagahama, lead economist at the Dai-ichi Life Research Institute.
“The ripple effect on gross domestic product is likely to be limited. “
Nomura Research Institute lead economist Takahide Kiuchi estimated that about 16 million low-income families would likely be eligible for the 50,000 yen in cash the government plans to distribute.
This can increase personal intake by about 225 billion yen, which would correspond to about 0. 04 percent of Japan’s annual nominal GDP, Kiuchi added.
“You can’t say this has a big economic impact. “
($1 = 142. 7000 yen)
(Reporting through Daniel Leussink and Kentaro Sugiyama; Editing via Stephen Coates)