The Japanese powerful lower house of parliament is to pass this year’s third extra budget on Tuesday despite criticism. People criticise it for concentrating too much on a government tourism campaign, rather than address imminent medical needs. This is in line with the spike in COVID-19 infections.
Prime Minister Yoshihide Suga declined calls from opposition parties to reorganize the 19-trillion-yen ($183 billion) extra budget. This was before the government declared a state of emergency in January.
Back then, the assumption was that infection numbers would subside. With that, 60% of the spending was earmarked for promoting a ‘green’ and digitalised economy as well as funding. The funding was to extend a government campaign to promote domestic travel until June.
However, in late December, a spike in infections forced Suga to shelve the travel campaign. It has drawn criticism from opposition parties that the extra budget has become irrelevant.
Moreover, another 16% of the third extra budget was set aside for infrastructure spending. Only 23% was left for preparation of vaccine roll-outs, including aid to medical institutions under strain from the rising number of patients.
Suga Turns Down Opposition Request
Japan’s largest opposition has called for taking 6 trillion yen out of the extra budget. That was to redirect the money to more imminent medical needs, a request Suga turned down.
Expected later on Tuesday is the approval of the budget by the lower house. The approval will secure its enactment. Japan’s upper house doesn’t have the legal power to disapprove a budget bill passed in the more powerful lower chamber.
The Prime Minister is already facing slumping poll ratings. That is due to disappointments over his handling of the pandemic. Any revision to the budget bill would have been a setback for him.
Adding to Japan’s already huge public debt are the huge funds the country needs in dealing with the pandemic. It is at twice the size of its $5 trillion economy, the largest among major economies.
Elsewhere, Taiwan’s economy is likely to have expanded 3.61% year-on-year in Q4. The export-dependent island continued to shake off the pandemic jolt with a return of strong shipments and consumer confidence.
The country’s trade-dependent economy grew 3.92% in Q3 from a year earlier. It was a solid rebound from a 0.58% contraction in Q2.
Taiwan is a key hub in the global technology supply chain for tech giants such as Apple Inc (NASDAQ:AAPL). A slightly slower gross domestic product (GDP) growth of 3.61% on year in October-December is likely. This was according to a poll of 14 economists.
- Trading Instrument