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Summary of Finance Minister Aso’s fiscal policy remarks at Diet

  • 2015-01-27 15:00:00
  • , Sankei
  • Translation

(Sankei: January 27, 2015 – p. 11)

 

 The Japanese economy has been recovering at a moderate pace, driven by Prime Minister Abe’s three-pronged economic stimulus — drastic monetary easing, flexible fiscal policy, and growth strategies aimed at stimulating private investment. But personal spending remains weak and the pace of economic recovery differs from region to region. The country’s gross domestic product for July-September contracted 1.9% at an annualized rate, staying in negative territory for two consecutive quarters. To deal with these situations, the cabinet on Dec. 27 approved an urgent economic package to expand the virtuous cycle to include rural areas.

 

 The package focuses on stimulating consumption by giving due consideration to each region, breathing new life into local economies by helping them address their structural problems and bolstering efforts to rebuild from natural disasters and accelerating reconstruction [from the 2011 earthquake].

 

 The supplementary budget for fiscal 2014 allocates 1.1854 trillion yen to support the lives of ordinary citizens, 578.3 billion yen to stimulate local economies and 757.8 billion yen to deal with natural disasters and other crises. To finance the budget, we will cut prescribed expenditures by 1.788 trillion yen. We forecast tax revenue and non-tax revenue will grow to 1.725 trillion yen and 114.8 billion yen, respectively. To ensure fiscal integrity, a surplus of 757.1 billion yen will be used to reduce public bond issuances. As a result, the general account budget for fiscal 2014 is projected to total 99.0003 trillion yen, 3.118 trillion yen more than when it was initially compiled. Enacting the supplementary budget bill is urgently needed to pull the Japanese economy out of prolonged deflation and expand the virtuous cycle.

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