Econintersect: In May the Japanese Diet passed a ¥4 trillion extra budget for finance disaster relief and reconstruction needed as a result of the March 11, 2011 earthquake and tsunami that devastated the northeastern region of the island nation. Monday (July 25) an additional ¥2 trillion extra budget was enacted, bringing the total to ¥6 trillion ($76 billion). More extra budget appropriations are anticipated but the amount is difficult to determine from various reports in the press.From The Japan Times:
The focus is now shifting to a third extra budget, which officials say could top ¥10 trillion and would force the government to issue “reconstruction bonds” to finance.
That implies the total for all extra budget appropriations could reach ¥16 trillion ($205 billion). It is expected that this will include the need for the issuance of reconstruction bonds and increase some taxes.
The amount could reach an even larger amount according to Reuters:
Tokyo plans additional spending of 13 trillion yen to help pay for Japan’s biggest rebuilding project since the period just after the World War Two. It has already set aside 6 trillion in the extra budget just passed in parliament and one approved in May.
That would bring the total bill to ¥19 trillion additional spending as a result of the disaster, or $243 billion. In addition to bonds and increased taxes, Reuters says that Japan will be “scaling back” spending plans in other areas.
China based CNC World has reported that the third extra budget appropriation (possibly another ¥4 trillion) could be enacted as early as next month.
Sources: The Japan Times , CNC World and Reuters
