TOKYO (Reuters) -Japan’s ruling Liberal Democratic Party (LDP) wants the government to introduce jet fuel subsidies and launch a discount tourism campaign as part of a relief package for the economy, a draft proposal obtained by Reuters showed on Thursday.
Prime Minister Fumio Kishida has instructed his cabinet to compile measures by April that will draw on budget reserves.
The size of the planned spending is not known, but the administration hopes to keep it relatively small, government officials with knowledge of the matter have told Reuters.
Kishida instead hopes to unveil a bigger spending plan closer to an upper house election scheduled in July, said the officials who were not authorised to speak to media and declined to be identified.
LDP party executives are expected to present the proposal to the government later on Thursday.
Spiking global commodity and energy prices due to the war in Ukraine, which have also driven a sharp fall in the yen, have caused to analysts to cut forecasts for the world’s third-largest economy. It is expected to expand an annualised 4.9% this quarter, below an earlier prediction of 5.6%, according to a poll.
“Developments regarding Ukraine are hard to predict and prices for various necessities are rising. We also need to scrutinise market moves, including recent yen declines,” the draft proposal said.
Both the LDP and its coalition partner Komeito called for the relief package to be compiled swiftly. The Komeito also called for an extra budget to be crafted as soon as possible.
“Japan’s economy could experience its biggest postwar crisis,” the Komeito’s draft proposal said.
