Abe Says Japan Will Create Extra Budget for Kumamoto Earthquake

JAPAN-QUAKE

Japanese Prime Minister Shinzo Abe, center left, meets survivors as he visits a earthquake affected area in Mashiki, Kumamoto prefecture, on April 23, 2016.

Soruce: AFP via Getty Images
  • Aims to pass before end of parliamentary session, election
  • Will include funds for housing, businesses and infrastructure

Japan’s Prime Minister Shinzo Abe said Sunday he will create an extra budget to address the economic damage caused by deadly earthquakes in Kumamoto earlier this month.

Abe wants to pass the budget before the current parliamentary session ends on June 1, which comes ahead of an upper house election in July. The earthquakes, which killed 48 people, have dealt a blow to policy makers struggling to gather momentum for an economic recovery.

Abe “can’t politically afford to take time to wait for” a rebound from the disaster, Hiroaki Muto, chief economist at Tokai Tokyo Research Center, wrote in a report last week. “There is a possibility that Japanese people will be in a self-restraint mood and that causes weakness in consumer spending.”

Abe said the extra budget will include funds for housing, businesses and infrastructure. “We will gather all strength of the government and work on the relief and reconstruction,” he said.

Finance Minister Taro Aso said the size of the budget hasn’t been decided. Last week, Kozo Yamamoto, a lawmaker in Abe’s ruling Liberal Democratic Party, called for an issue of 20 trillion yen ($179 billion) in bonds to go toward disaster relief and helping the economy.

Earthquakes as big as 7.3 magnitude hit Kumamoto prefecture in the southern island of Kyushu in mid-April. In addition to the 48 people killed, 263 were seriously injured and 1,527 houses were destroyed, a report from Abe’s office said. Japan hasn’t experienced a natural disaster as severe since an earthquake and tsunami struck the northeast of Honshu, the main island, in 2011.

Intensity map of Kumamoto earthquake on Saturday April 16, 2016, at 1:25 a.m. JST
Intensity map of Kumamoto earthquake on Saturday April 16, 2016, at 1:25 a.m. JST

Kumamoto’s economy accounts for about 1.1 percent of Japan’s gross domestic product, according to the Cabinet office.


Japan's Earthquakes: Handling the Aftermath

Two major earthquakes hit southern Japan in less than two days


Before it's here, it's on the Bloomberg Terminal. LEARN MORE