Japan's 12.1 trillion yen ($160 billion) extra budget for rebuilding north-east coastal areas devastated by the March 11 earthquake and tsunami will likely boost gross domestic product by around 1.7 percent, the government said on Friday. The effect will be mostly felt in the fiscal year starting next April, mainly in the form of public spending, the Cabinet Office said.
The third extra budget for the year ending in March, submitted to parliament on Friday, earmarks 9.24 trillion yen for the reconstruction effort, including 2 trillion yen for subsidies and other steps to help companies cope with the strong yen. The budget is projected to create some 600,000 jobs, the Cabinet Office said. Tokyo plans total spending of 19 trillion yen over the next five years to rebuild areas devastated by the March disaster, which includes 6 trillion yen already approved by parliament in two extra budgets for the current fiscal year.
Japan's GDP came to 538.532 trillion yen ($7.1 trillion) in the year that ended in March. The government estimated in August that GDP would grow a real 0.5 percent in fiscal 2011/12 and 2.7 to 2.9 percent the following year. The Bank of Japan estimated on Thursday the economy will grow 0.3 percent this fiscal year and 2.2 percent next year.
On Friday, Prime Minister Yoshihiko Noda told parliament, where opposition parties control the upper house, that the third extra budget "must be implemented quickly to accelerate post-quake reconstruction, resolution of the nuclear crisis and economic recovery."
Comments
Comments are closed for this article.