KEY TAKEAWAYS
- Prime Minister Takaichi Sanae has outlined a relatively minimalistic supplemental budget to ensure adequate funding for fuel and utility subsidies.
- However, lawmakers and business leaders are pressing for the prime minister to offer a plan for scaling back subsidies that have kept Japan’s gasoline prices at the “lowest level among the G7 countries,” warning of the risk of the open-ended spending commitment.
- The prime minister cannot easily reduce these subsidies, as doing so would contribute to higher inflation and could therefore be politically costly.