The Japanese government today approved an additional budget of $19 billion to support households facing a sharp rise in daily costs caused by the war in Iran, Agence France-Presse reported, BTA reported.
The additional budget was “decided“ at a cabinet meeting, the Prime Minister's Office reported on its website.
Government spokesman Minoru Kihara told a news conference that the cabinet had approved a total of 3.1135 trillion yen. (about 16.7 billion euros).
“In view of the ongoing uncertainty surrounding the situation in the Middle East, we have prepared this budget with the aim of minimizing risks“, he said Kihara.
He added that the budget would provide “a stable financial response capacity“ and that the government would closely monitor price developments “so that people's daily lives and economic activity are not disrupted“.
In late May, Prime Minister Sanae Takaichi said the budget would be used to cushion the rise in gasoline, electricity and gas prices, explaining that “the situation in the Middle East remains uncertain“.
“In order to minimize risks, we have prepared a supplementary budget to be fully prepared financially“, she told the media.
Takaichi added that the government expects to ensure stable oil supplies at least until next spring. According to her, alternative sources of supply of naphtha (a petroleum derivative used in various industries) outside the Middle East east, have already recovered more than 80% of their previous levels.
The Bank of Japan raised its inflation forecast for April and lowered its growth forecast after a sharp rise in oil prices due to the Iran war. The bank said that “the rise in crude oil prices is likely to lead to price increases, mainly for energy and goods, as efforts continue to pass on wage increases to final prices“.