Japan cabinet approves 13.1 trln yen extra budget

Wednesday, 16 January 2013 00:02 - - {{hitsCtrl.values.hits}}

TOKYO, Jan 15 (Reuters) - Japan’s cabinet approved on Tuesday a 13.1 trillion yen ($146.8 billion) extra budget, which includes 10.3 trillion yen in economic stimulus spending announced last week, as the government tries to boost a flagging economy.

The extra budget, which also contains 2.6 trillion yen to offset a shortfall in the pensions system, takes government spending for the Japanese Prime Minister Shinzo Abe fiscal year ending in March to 100.5 trillion yen, a statement from the finance minister showed.

Compared with previous fiscal years when the government has compiled extra budgets, government spending reached the third-highest on record, a finance minister official told reporters at a briefing.

The government will sell an additional 5.2 trillion yen in government bonds, which would raise bond issuance in fiscal 2012/2013 to 49.5 trillion yen, according to the statement.

For the current fiscal year, the government will rely on bond income to fund 49.2% of spending, which is the second-highest ratio on record, the official said.

The highest ratio of 52.1% was set when the government compiled an extra budget in fiscal 2009/2010 due to the financial crisis.

Japan’s cabinet approved an economic stimulus package on Friday in the biggest spending boost since the financial crisis, as Prime Minister Shinzo Abe pursues an ambitious agenda to spur growth and end nagging deflation.