May 25, 2022

In response to the Comprehensive Emergency Measures to Address Soaring Crude Oil and Commodity Prices and Related Matters in the COVID-19 Pandemic, which was recently decided by the Ministerial Conference on the rise in crude oil and commodity prices, I have decided to submit a supplementary budget for FY2022, and would like to explain the main points of this for your consideration.

(Current state of the Japanese economy and the basic approach to the comprehensive emergency measures)

As for the Japanese economy, the severe situation caused by the COVID-19 pandemic is easing. However, the impact of the infectious disease on people’s lives and the economy continues. Against this backdrop, uncertainty about the future of the economy is increasing due to instability in prices and supplies of crude oil, grains, and other commodities, mainly as a result of Russia’s aggression against Ukraine and other factors. The pace of recovery of economic and social activities from the COVID-19 pandemic may be severely hampered in the future.

Based on this recognition, on April 26, we decided on the Comprehensive Emergency Measures to Address Soaring Crude Oil and Commodity Prices and Related Matters in the COVID-19 Pandemic.

These comprehensive emergency measures are designed to ensure the recovery of economic and social activities from the COVID-19 pandemic through the urgent and flexible implementation of measures to mitigate the impact of rising prices, as well as to promote smooth price transfers and wage increases.

First, we have compiled a supplementary budget for FY2022 after responding promptly to the comprehensive emergency measures by using the general reserve fund and the contingency funds for the COVID-19.

(Outline of the supplementary budget for FY2022)

Next, I would like to outline the supplementary budget for FY2022.

The total amount of expenditure in the general account will be approximately 2.7 trillion yen.

The contents are based on the comprehensive emergency measures to ensure the safety of the people of Japan and to respond promptly to unforeseen financial needs arising from future disasters, the re-expansion of COVID-19 infections, and the further rise in crude oil prices and commodity prices. Approximately 1.17 trillion yen will be allocated for countermeasures against crude oil price hikes, including projects to mitigate the drastic change in fuel oil prices since June, and 400 billion yen will be allocated for the general reserve fund. In addition, the contingency funds for the COVID-19 will be expanded to reserve for countermeasures against the COVID-19 pandemic, crude oil price hikes, and inflation, and a total of 1.12 trillion yen will be appropriated for this purpose.

In addition, approximately 7 billion yen will be appropriated for transfer to the special account of government debt consolidation fund.

In terms of revenue, we plan to issue public bonds for approximately 2.7 trillion yen.

As a result, the total budget after the FY2022 general account amendment will be approximately 110.3 trillion yen, an increase of approximately 2.7 trillion yen in both revenue expenditure compared to the initial general account budget.

The special account budget will be revised accordingly.

(Conclusion)

This concludes my explanation of a summary of the supplementary budget for FY2022. I hereby request that the Diet deliberate on the budget and promptly give its approval.