Japanese gov't to approve economic package amid compromises with opposition

Japan's minority government is set to approve an economic stimulus package amid inflation and compromises with resurgent opposition, according to local media on Thursday.

The coalition government of Prime Minister Shigeru Ishiba, led by the Liberal Democratic Party (LDP), is expected to announce 39 trillion yen ($252 billion) in economic package to “support consumer spending as disposable incomes are whittled away by resurgent prices,” government sources told the Tokyo-based Kyodo News.

It said the package, likely to be finalized by Friday, will include “subsidies to offset high electricity, gas and gasoline prices while delivering cash handouts to low-income households.”

Amid a prolonged stagnant growth, Japan, the world's fourth largest economy, saw economic expansion for two consecutive quarters until the July-September period this year.

However, the Ishiba-led coalition with the Komeito party must seek the parliament's approval for a supplementary budget for the current fiscal year which ends in March 2025.

The LDP-Komeito minority government is short of numbers in the lower house of the parliament where it requires the support of 12 more lawmakers to pass the 233 threshold to pass any bill.

It is the first time since 2009 that the LDP lost its parliamentary majority in general elections held last month.

Mindful of the critical support needed in the parliament, the minority government accepted the opposition Democratic Party for the People's (DPP) demand to raise the tax-free income threshold, as well as to consider cutting gasoline taxes.

Currently, Japan's tax-free income limit stands at 1.03 million yen ($6,600).

The agreement allowed the Ishiba Cabinet to finalize the economic package.

The DPP has 28 lawmakers which can help LDP-Komeito to sail through the parliament easily.